WPI inflation edges up in Feb, stays in double digits for 11th month

India's inflation based on the Wholesale Price Index (WPI) rose to 13.11 percent year on year in February from 12.96 percent in January, according to data released by the commerce ministry on March 14.

WPI inflation was 4.83 percent in February 2021.

While the Reserve Bank of India's (RBI) policy target is spelt out in terms of the Consumer Price Index-based inflation, high WPI inflation is seen as a precursor to higher consumer prices as producers pass on rising costs to their customers.

This is the 11th consecutive month in which WPI has been in double digits.

Wholesale inflation was driven higher last month by a greater rise in prices of manufactured products compared to January, while the other two major groups of the WPI saw marginal declines in their inflation.

Inflation for manufactured products, which accounts for 64.23 percent of the WPI basket, rose to 9.84 percent year on year in February from 9.42 percent in January. Inflation for primary articles edged down to 13.39 percent from 13.87 percent, while that for the fuel and power group inched lower to 31.50 percent from 32.27 percent.

The slight decline in fuel and power inflation will be of little consolation as the month-on-month rise in the index for the fuel and power group was a massive 4.35 percent.