Inflation Current Affairs - 2019
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The Central Statistical Office (CSO) has released the data of Inflation for the month of February 2019. The data shows that:
- Retail inflation was at a four-month high of 2.57 per cent in February 2019 due to costlier food articles. The retail inflation was highest since October 2018 when it stood at 3.38 per cent.
- Consumer Price Index-based inflation for January 2019 was revised down to a 19-month low of 1.97 per cent from an earlier estimate of 2.05 per cent.
- Food inflation at (-) 0.66 per cent in February 2019 was lower against 3.26 per cent in the same month last year.
- The consumer food price index increased by 0.15 per cent in February against January 2019.
- The prices of Protein-rich items such as meat & fish and eggs witnessed a quick rise in prices at 5.92 per cent and 0.86 per cent respectively in February.
- The prices of cereal and products went up at 1.32 per cent.
- Fruits and Vegetable prices continued their declining trend.
- In the fuel and light category, the rate of price rise slowed to 1.24 per cent from 2.20 per cent in January.
With the headline inflation reading at 2.57 per cent and industrial production growth on the downside at 1.7 per cent, economists see a case and space for one more rate cut of 25 bps by RBI in April to support growth.
The Union Ministry of Commerce and Industries has released the data on WPI Inflation. The data makes the following observations:
- The WPI Inflation fell to a 10-month low of 2.76 per cent in January owing to softening prices of fuel and some food items.
- The WPI inflation has stood at 3.8 per cent in December 2018, and 3.02 per cent in January 2018.
- Manufactured products inflation which has a weightage of 64.23 per cent in WPI declined to 2.61 per cent in January, from a level of 2.96 per cent in January 2018.
- The wholesale based price inflation for ‘fuel and power’ segment fell sharply to 1.85 per cent as against 8.38 per cent in December 2018, due to easing in prices of motor fuel and LPG.
- The government also revised the November WPI downwards to 4.47% from 4.64% earlier.
- The primary articles inflation with the weightage of 22.62 per cent increased to 3.54 per cent in January from 2.53 per cent in same month last year.
In its last monetary policy review, RBI had decreased the lending rate by 0.25 per cent. It is expected that the decrease in inflation may provide further head-room to the RBI to cut interest rate (repo) in the coming months.