The wholesale inflation has increased to 2.93% in February. In January it was 2.76%. This was the lowest in 10 months. The rise in wholesale price inflation in February is due to the rise in primary articles, fuel and electricity prices. The government released its figures on Thursday.
The wholesale price of primary articles such as potatoes, onions, fruits, and milk increased to 4.84% in February. In January it was 3.54%. The wholesale price of fuel and power segments rises from 1.85% (January) to 2.23% (February).
The wholesale inflation has increased for the first time in four months. It was consistently reduced from November to January. 3.46% in December 2018, 4.64% in November and 5.28% in October.
Increasing in the price of food items, retail inflation has registered 2.57% in February. It's the highest in four months. Retail inflation data came on Tuesday.
RBI (The Reserve Bank of India) has remained consistently below the target of 4% in recent months. It is believed that in the monetary policy review on April 4, the Reserve Bank may reduce the repo rate by 0.25%. The Reserve Bank looks at retail inflation to fix interest rates.
Core inflation is above 6%. This can be a hurdle in the rate cut. In the February review, the RBI has set a target of 2.8% for January-March. In 2019-20, the target of 3.2% -3.4% in April-September.
In January, industrial production increased by just 1.7%. Its main reason is the sluggishness in the manufacturing sector. The speed of both large machinery and consumer goods has decreased.
One year ago, in January 2018, Industrial production growth was 7.5%. Meanwhile, CSO has revised the IIP data of December 2018 from 2.4% to 2.6%. Production of machinery decreased in January. This area is considered an indicator of new investment.
