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WPI eases to low in 2 years in February

Published on March 15, 2023
Current context: Wholesale price inflation (WPI) is at 3.85% in February in the 25the month. This is due to the reduction in input costs according to official data. In May 2022, it was 16.63% which was the highest for the 9th month consecutively.
WPI eases to low in 2 years in February
  • Retail inflation remained high recently above the tolerance band of RBI. The target that was taken was 4+/2% in both January as 6.52% and February as 6.44%.
  • It is expected to be moderate at the month of March. WPI was at 4.73% in January and at 13.43% in February 2022.
  • WPI inflation in December 2022 was 5.02% from the previously calculated data at 4.95%. WPI inflation of food articles is estimated at 3.81% for February as compared to January at 2.38%.
  • The difference in WPI and retail inflation is because of the following two reasons- The weights of the indices are different and WPI do not include services sector but retail inflation includes the services sector.
  • RBI raises its rates by 25 basis points. The repo rate stays at 6.5% after the increase of basis points by 250 since May 2022.
  • Prices at wholesale level rose by 0.2% month after month followed by 0.1% increase in January.
  • According to CareEdge ratings WPI inflation will take a negative turn in May and June 2023. In the next fiscal year, the WPI is expected to be below 3%.
  • By India Ratings, the estimated WPI is 1.7% which hit a 29 month low from 1.4%.
  • Core inflation which considers non-food sector is at the lowest for the 10th month at 2.1% in February against 2.8% in January. Retail inflation remained at 6.1% in February.
  • Milk inflation rose to a 102-month high of 10.3% in the February month along with certain fruits. Cereal WPI eased to 13.95% in February. In January, it was 15.46%.

Question: 

Q.1 Wholesale price inflation (WPI) is at ______in February in the 25the month
a. 6.5%
b. 3.85%
c. 7.2%
d. 4.4%
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