NEW DELHI- India’s wholesale inflation in February rose to 2.38 percent year-on-year, slightly above 2.31 percent in January as a slowing food price increase was offset by a narrower drop in fuel prices, government data released on Monday showed.
The wholesale inflation, a proxy for producer prices, was marginally higher than the 2.36 percent projected by economists in a Reuters poll.
Wholesale food prices rose 5.94 percent in February, slowing from a 7.47 percent rise in January.
Cereal prices rose 6.77 percent in February, against a 7.33 percent rise a month earlier.
Vegetable prices fell 5.80 percent, compared to an 8.35 percent rise in the prior month. However, prices of potatoes, onions and fruits rose between 21 percent and 48 percent.
“The downward pressure on the headline print on account of the dip in food inflation was offset by the narrowing deflation in the fuel and power segment,” said Rahul Agrawal, economist at ICRA.
Fuel and power prices dropped 0.71 percent year-on-year, compared with a 2.78 percent drop in January.
Prices of manufactured products, which account for about 64 percent of the wholesale price index, increased 2.86 percent after rising 2.51 percent rise in January.
Inflation pressures in the South Asian country have been easing in recent months as favorable weather has helped vegetable output and improved supplies, raising expectations for more interest rate cuts in the coming months.
India’s retail inflation fell below the central bank’s 4 percent target in February mainly due to a decline in vegetable prices, government data showed last week.
