Published: Mon, April 16, 2018
Finance | By Claude Patterson

Inflation slows in 1Q on fees-free policy

Inflation slows in 1Q on fees-free policy

The poll also found the core consumer price index, which includes oil products but excludes volatile fresh food prices, was expected to rise 0.9 percent in March from a year ago versus a 1.0 percent gain in February.

India's annual wholesale price inflation slightly eased in March, at 2.47 percent, a nine-month low, owing to a fall in prices of vegetables and other food and beverages, data from Ministry of Commerce & Industry revealed on Monday. Build up inflation rate in the financial year so far was 2.47% compared to a build-up rate of 5.11% in the corresponding period of the previous year.

Index of primary articles in WPI declined by 0.5% to 127.4 (provisional) from 128 (provisional) for the previous month.

ANZ Bank New Zealand economists said the fees-free first-year tertiary education policy broadly offset any inflationary pressure coming from the usual annual increase in tobacco excise duty, with a 4 per cent fall in the education group instead of its typical first quarter rise. The index for "Manufacture of Wearing Apparel" sub-group declined by 0.9 per cent to 137.8 from 139.0 for the previous month due to lower price of woven apparel, except fur apparel, and knitted and crocheted apparel (1 per cent each). Deflation in pulses was 20.58 per cent, in vegetables (2.70 per cent), wheat (1.19 per cent) and egg, meat and fish (0.82 per cent) in March.

The index for "Minerals" group declined by 2% to 119.7 (provisional) from 122.2 (provisional) for the previous month due to lower price of copper concentrate (14%) and phosphorite (1%).

The index for "Crude Petroleum & Natural Gas" group declined by 0.5 percent to 80.2 from 80.6 for the previous month due to lower price of crude petroleum. However, the price of rectified spirit (2%) and country liquor (1%) declined. WPI Food Index holds 24.38% in the overall wholesale inflation.

Inflation in "fuel and power" basket however rose to 4.70 percent in March from 3.81 percent in the previous month.

Moreover, the retail inflation eased to 4.28 per cent, a five-month low in March, but remained above RBI's medium-term target, supporting views that monetary policy is likely to remain unchanged at the next review in early June.

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