Feb WPI around -0.65%; mfg, fuel inflation to decline: Poll

Wholesale price index (WPI) for the month of February, which will be released today is likely to be lower on back of low fuel and manufacturing inflation.According to CNBC-TV18 poll WPI is likely to see contraction or be a deflationary figure of 0.65 percent. The range may be anywhere between a positive tick of 0.3 to a decline of over 1.1 percent. The core inflation is estimated to possibly decline further to a figure of around 0.6 versus around 0.88 percent month-on-month basis. However, year-on-year number may not see much of a base impact. The February 2014 WPI was around 5.03 percent.Manufacturing inflation is expected to be lower, which will keep the WPI subdued this time and could lead to lower core inflation. The decline in fuel inflation too is expected to be 10-11 percent similar to the decline in the previous month of 10.69 percent. Therefore, the expectation is that low manufacturing inflation combined with low fuel inflation may keep WPI in a benign territory as opposed to the impact from the food inflation.However, there is a need to watch out for food inflation figure because the consumer price index (CPI) data for the month of February indicated an uptick in food inflation of over 60 basis points month-on-month. Therefore, food inflation for WPI could rise about 50 bps to a level of around 8.5 percent.However, this time there could be a slight unfavourable base effect in terms of food inflation. For example in February 2014, the food inflation declined 100 bps month-on-month and the vegetable inflation in February 2014 declined to 2.4 versus 13.5 percent month-on-month.