March wholesale prices show steepest fall in nine years

Deflation persisted for the fifth consecutive month as wholesale price index based inflation fell to a record low of (-) 2.33 per cent in March on account of cheaper food and fuel products as well as manufactured items.

Inflation measured on wholesale price index (WPI) was at (-) 2.06 per cent in February, (-) 0.39 per cent in January, (-) 0.50 per cent in December and (-) 0.17 per cent in November. It was 6 per cent in March 2014.

Deflation was also visible in the manufactured products category where the rate of price rise dropped to a record low of (-) 0.19 per cent.

Inflation in food articles category stood at 6.31 per cent, and for fuel and power, it was (-) 12.56 per cent.

While inflation in onions, milk and protein-rich items like egg, meat and fish inched upwards, vegetables and fruits saw the rate of price rise decline during the month.

The rate of price rise in potato saw the steepest fall at (-) 20.66 per cent in March, while for wheat it was (-) 1.19 per cent.

Inflation in vegetables was 9.68 per cent in March, as against 15.54 per cent in February.

The January WPI inflation data has been revised downwards to (-) 0.95 per cent as against the provisional estimate of (-) 0.39 per cent.

As per the CPI inflation data released last week, retail inflation fell to a 3-month low of 5.17 per cent in March on the back of easing food prices.

The decline in inflation and a positive industrial output data would give room to the Reserve Bank to consider a cut in interest rates as has been the demand of the industry.

Besides, industrial output growth jumped to nine-month high of 5 per cent in February on better performance of manufacturing sector and higher offtake of consumer as well as capital goods.