Wholesale Inflation Increases To 5.13% On Rising Fuel Costs

Wholesale price-based inflation for the September month has increased after two-continuous months of softness due to rising fuel costs. Measured by WPI or wholesale price index, wholesale inflation has increased to 5.13% in comparison to inflation figure for the corresponding month last year.

On the other hand, CPI measuring retail inflation for September increased only marginally and stood a tad below RBI's medium term inflation target of 4%.

Crude and petroleum prices registered an increase of 47.83% while at the same price of LPG also rose year-on-year by as much as 33.5%. Food prices on the other hand remained steady for the month.

Furthermore, on a year-on-year basis, primary articles fell in price by 2.97%, food article also posted a decline in price of 0.02%. At the same time, potato saw a 80% jump in price in one year's time.

In its fourth-monetary policy review meet in early October, as against expectations, RBI's MPC kept repo rates unchanged at 6.5%. But nonetheless, it changed its monetary policy stance from neutral to calibrated tightening.

On the inflation front, projection has been maintained in the range of 3.9-4.2% for the second half of FY19. At the same time, cautiousness has been advised due to possible upside risk to inflation on account of a number of factors that include sinking rupee, rise in crude oil price and increase in MSP for farmers.

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