WPI inflation rises to 5.13% in September

After easing in the month of August, the WPI inflation surged to 5.13 percent against 4.53 percent in the previous month of FY19. The inflation in food climbed to 0.14 percent as against a negative 2.25 percent in August 2018. The wholesale inflation in the month of July was 5.09 percent. The deflation in vegetables was 3.83 percent in September as against 20.18 percent in the previous month. Inflation in ‘fuel and power’ basket in September was 16.65 percent. Individually, in petrol and diesel it was 17.21 percent and 22.18 percent, respectively, and for LPG it was 33.51 percent.

In the month of September, the core inflation stood at 4.90 percent, compared to 4.80 percent in August 2018. The inflation in the non-food articles stood at 4.17 percent in September 2018 as against 3.48 percent in the last month.

Meanwhile, the September CPI Inflation rose, albeit moderately, to 3.77 percent from 3.69 percent in the previous month.

In its fourth monetary policy review, the RBI maintained status quo on the rates but issued warning that surging oil prices, and weak global financial conditions pose substantial risks to the growth and inflation. For October to March period, the RBI had estimated CPI-based retail inflation to be between 3.9-4.5 percent.

Excluding the HRA impact, retail inflation is estimated at 3.7 per cent in Q2 FY19, 3.8 – 4.5 percent in H2 and 4.8 per cent in Q1 FY20. The central bank has retained the GDP growth projection for FY19 at 7.4 percent as 7.4 percent in Q2 FY19 and 7.1-7.3 per cent in H2FY19.

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