Wholesale Inflation Soars as Economists Call End to India Easingby
WPI rises 5.25% in January versus 4.35% survey estimate
While CPI eased, data on Monday showed faster core inflation
India’s wholesale inflation surged more than estimated to the highest since July 2014, supporting the central bank’s shift to a "neutral" monetary stance.
Wholesale prices rose 5.25 percent in January from a year earlier, the Commerce Ministry said in a statement on Tuesday. That’s faster than the 4.35 percent median estimate in a Bloomberg survey of 25 economists.
While the wholesale data contrasts with consumer price gains -- which slowed to the lowest on record -- the jump is in line with core CPI that strips out volatile food and fuel costs. Persistent core inflation may keep central bank Governor Urjit Patel from adding to seven interest rate reductions that began January 2015, according to economists including Rahul Agrawal at Religare Securities Ltd.
Patel last week kept the benchmark repurchase rate unchanged at 6.25 percent and changed the policy stance to "neutral" from "accommodative."