NEW DELHI (Reuters) -India’s wholesale inflation in January remained steady at 2.31% year-on-year, from 2.37% in December, government data showed on Friday, on moderation in food and fuel prices.
The wholesale inflation rate, a proxy for producer prices, last month was a tad lower than the 2.5% projected by economists in a Reuters poll.
Food prices rose 7.47% in January, compared with an 8.89% increase in December, with vegetable prices climbing 8.35% year-on-year, sharply lower than a 28.65% rise in the previous month. Cereal prices rose 7.33% in January as against a 6.82% rise a month ago.
Prices of manufactured products, which account for about 64% of the wholesale price index, increased 2.51% from a 2.14% rise in the previous month.
Fuel and power prices in India dropped 2.78% year-on-year, compared with a 3.79% drop in December.
India’s headline retail inflation slowed to a five-month low in January as food price inflation eased, raising hopes of another interest rate cut in the South Asian economy.
Last week, the Reserve Bank of India cut its key interest rate for the first time in nearly five years to boost the sluggish economy upon inflation easing towards its 4% target.
The central bank sees inflation averaging 4.8% in the current financial year, easing to 4.2% next year. It said food inflation pressures were expected to ease but volatile global energy prices pose a risk to the inflation outlook.
(Reporting by Shivangi Acharya and Sarita Chaganti Singh; Editing by Rashmi Aich)
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