Ministry of Commerce and Industry recently releasedWholesale Price Index (WPI) numbers for February 2021.
4.17% is the number and this is 27-month high. The numberwas 2.03% in January 2021.
Aditi Nayar, Principal Economist, ICRA, “The doubling in theWPI inflation to a 27-month high 4.2 percent in February 2021 from 2 percent inthe previous month, was fairly broad-based, reflecting the rise in commodityprices brought on by the global risk-on sentiment, hardening of crude oil andfuel prices, as well as a fading of the favourable base effect for food items.”
She continues, "While the core inflation rose furtherto a series high 5.5 per cent in February 2021, the pace of month-on-monthincrease tempered, benefitting from the sequential dip recorded by basic metals."
These numbers are indicative of the hardships that themiddle and lower classes of India have to face. This is more relevant nowadays whenthe decimation done by the pandemic COVID19 has still not been handled.
Further, in its latest monetary policy decision on February5, the interest rates were kept unchanged. This was the fourth consecutivemeeting in which no change was made to the interest rates. Though, in thismeeting it was observed that the near-term inflation outlook has turnedfavourable.
Also read: Sensex and Nifty close lower by about 0.7%
Now, let’s look at some detailed numbers regarding inflationstatistics released.
WPI Food Index was 3.31%, the index for primary articles wasat 1.82%. Non-food articles inflation was down from previous month and was at-0.51%.
Nayar claimed,“Looking ahead, we expect large upticks in theWPI inflation over the next three months, as the wedge between the commodityprices and their year-ago level intensifies. We expect the headline and coreWPI inflation to rise to around 6 per cent each in March 2021. Subsequently, weexpect the headline WPI inflation to harden further to between 9-9.5 per cent ,and the core-WPI inflation to climb to 7-7.5 per cent by May 2021, beforedisplaying a more gradual moderation to 4 per cent each by the end of 2021.”