New Delhi: Inflation based on the wholesale price index (WPI) turned negative in January at (-) 0.39 per cent due to fall in prices of manufactured and fuel items. This is the lowest inflation level in five and a half year. However, as far as common man is concer-ned, there is no respite as food prices are still rising at a higher pace.
In January, vegetable prices rose by 20 per cent, fruits by 17.19 per cent, pulses by 12.34 per cent and milk by 9.13 per cent pinching the people. However, the price of onion, egg, meat and fish came down. Overall food inflation in January moved up to 8 per cent against 5.20 per cent in December and 0.66 per cent in November. “January Wholesale Price Index (WPI) inflation fell, defying expectations of a moderate rise. This was largely due to higher food costs being more than offset by the decline in fuel and core inflation,” said HSBC Global Research in a report on Monday.
It said that RBI may be targeting the Consumer Price Index based inflation now, but it is still useful to observe WPI readings since it captures inflation closest to producers and has a broader coverage of manufactured products. “WPI shows that there is complete absence of price pressures at the producer level thanks to cheaper oil and sluggish growth,” said the HSBC report.
