Dec WPI inflation fall to 6.16 per cent; fuels hope on RBI rates

Business

oi-Sunil

By Sunil Fernandes

Published: Wednesday, January 15, 2014, 12:18 [IST]

India's December WPI inflation eased considerably to 6.16 per cent, against consensus estimates of 7 per cent, raising hopes that the RBI would keep rates on hold in its policy meeting later today. The WPI inflation for Oct was revised to 7.24 per cent from 7 per cent.

The primary articles index was down 5 per cent, month on month. The manufactured products index on the other hand remained unchanged for the month of Dec.

The Food Articles inflation index was down substantially from 13.68 per cent vs 19.93 per cent, month on month, pushing prices lower.

"The index for 'Food Articles' group declined by 6.4 percent to 240.1 (provisional) from 256.4 (provisional) for the previous month due to lower price of fruits & vegetables (21 per cent), fish-inland (8 per cent), coffee (7 per cent), tea and ragi (3 per cent each) and gram, rice and mutton (1 per cent each). However, the price of poultry chicken (6 per cent), egg (5 per cent), moong (4 per cent), condiments & spices (3 per cent), jowar, barley, masur and wheat (2 per cent each) and fish-marine, milk, arhar, maize, pork, bajra, beef & buffalo meat and urad (1 per cent each) moved up.

The index for fuel and power group rose by 0.8 percent.

The index for this major group rose by 0.8 percent to 211.3 (provisional) from 209.6 (provisional) for the previous month due to higher price of electricity (industry) (3 per cent), LPG (2%), high speed diesel, electricity (commercial), electricity (railway traction), aviation turbine fuel, bitumen and electricity (domestic) (1 per cent each). However, the price of furnace oil (1 per cent) declined.

Today's WPI inflation reading is likely to help the RBI to keep interest rates on hold at its policy meeting slated later this month.
In its last meeting the RBI had kept rates on hold despite an ugly inflation number.

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