March wholesale price inflation cools to 5.70% even as food prices heat up

New Delhi: Inflation based on the wholesale price index slipped to 5.70 percent in March as manufactured goods showed cost decline even as food prices hardened. The WPI inflation, reflecting the annual rate of price rise, in February was 6.55 percent. In March 2016, the print came in at (-)0.45 per cent. According to official data released today, food prices saw a sharp rise of 3.12 percent in March compared to 2.69 percent in the previous month. [caption id=“attachment_2941468” align=“alignleft” width=“380”]  Reuters[/caption] This is primarily because of a steep price jump in vegetables where inflation stood at 5.70 percent. As for fruits, the figure was also high at 7.62 percent, while for egg, meat and fish, it was 3.12 percent. Fuel inflation declined to 18.16 percent, from 21.02 percent in February. The manufactured items witnessed some softening in price rise, with inflation at 2.99 percent in March, as against 3.66 percent in the previous month. The government also revised upwards January inflation to 5.53 percent from the provisional estimate of 5.25 percent. Earlier this month, the Reserve Bank had left key policy rate unchanged at 6.25 percent for the third review in a row citing upside risks to inflation. It had, however, increased the reverse repo rate – which it pays to banks for parking funds with it – by 0.25 percent to 6 percent, narrowing the policy rate corridor. For 2017-18, it projected retail inflation to average 4.5 percent in the first half and 5 percent in the second half. Data released last week showed that retail inflation touched a five-month high of 3.81 percent in March on costlier food items and non-food products like fuel and light. RBI frames its monetary policy stance on the basis of retail inflation.