India: Inflation unexpectedly rises in February
March 14, 2011
In February, the WPI wholesale price index (WPI) ? India's headline inflation measure ? added 0.07% over the previous month. The reading came in well below January's 1.25%, but was broadly in line with the behaviour observed in the same month last year. As a result, annual wholesale inflation actually inched up to 8.3% (January: 8.2%), contrasting market expectations that had WPI inflation falling to 7.8% and confirming that price pressures are yet to yield. The drivers behind February's rise in WPI inflation diverged from previous months, as higher prices for manufactured goods more than offset lower prices for food products, in particular fruits and vegetables, which dropped 20.0% month-on-month. Meanwhile, January's consumer price index for industrial workers (CPI-IW) increased 1.62% over the previous month. The reading was virtually unchanged from the 1.65% monthly price rise observed in December. Annual consumer price inflation moderated slightly to 9.3% (December: 9.5%). On 18 February, the Ministry of Statistics and Programme Implementation (MOSPI) released the provisional January 2011 indices of a new series of Consumer Price Indices for all-India. The MOSPI emphasised that data remained provisional, and that a period of one year was needed to ensure the ?stabilized and adequate timely receipt of price data?. There are no backward figures for the new time series and, consequently, year-on-year figures will not be available until next year. Despite the relatively strong monthly figure, annual average wholesale prices inched down to 9.2%.