Jan WPI inflation falls to 5.05%; raises expectations from RBI
Food inflation led declines in the WPI with the index for 'Food Articles' group declining by 2.7 percent
Lower price of fruits & vegetables (11%), maize (3%), ragi (2%) and gram, coffee, arhar and tea (1% each), helped push food index lower.
However, the price of poultry chicken (5%), pork (3%), urad and egg (2% each) and moong, bajra, condiments & spices, masur, fish-inland, beef & buffalo meat and fish-marine (1% each) moved up. The manufacturing index which had the highest weightage in the WPI index of 64.97 per cent rose by 0.5 percent month on month.
The fuel and power index which has a weightage of 14.91 per cent, rose by 0.7 percent month on month. The government also left the inflation number for Nov unchanged.
Today's inflation reading may raise expectations from the RBI to cut rates sooner than expected. However, economists feel that the RBI may choose to hold rates as food inflation has remained volatile and any increase in food inflation is likely to push inflation higher once again.
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