WPI inflation eases to 2.47% in March on cheaper food items

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Lastly, dairy product prices fell at the latest GDT auction, dragged lower by an unexpected plunge in anhydrous milk fat.

The Department of Statistics is set to announce March inflation on Wednesday. Under this, index for "Food Articles" group declined by 0.4 percent to 137.2 (provisional) from 137.8 (provisional) for the previous month due to lower price of egg (5%), gram, tea, coffee, poultry chicken and condiments & spices (3% each), rajma (2%) and fish-inland, masur, bajra, fruits & vegetables and beef and buffalo meat (1% each).

The annual inflation rate in Brazil decelerated to 2.68% in March, from 2.84% in February, remaining below the bottom of the central bank's target, which ranges from 3% to 6%.

"Despite our base-case assumption, Bank Negara Malaysia's future actions are expected to be data-dependent".

It may be recalled that WPI inflation was at 5.11 per cent in March a year ago.

The index for primary articles rose only 0.24 percent annually in March, while prices of food articles dropped by 0.29 percent.

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Sunil Sinha, Principal Economist, India Ratings & Research, said inflation in the food article category - which has been declining since November 2017- turned into deflation in March 2018.

According to a government data released today, food articles showed deflation at 0.29 percent in March as against a 0.88 percent inflation in the preceding month. This was mainly driven by the sharp correction in prices of vegetables, he said.

Food prices were 0.3 per cent lower compared to February and services prices shrank by 0.4 per cent, while non-food prices were down by 0.2 per cent.

It may be too early to draw any inference from such movement, the divergence suggests that impulse of demand recovery at the moment is being felt at the retail level and not so much at the wholesale level, he said.

On a year-on-year (YoY) basis, onion prices soared higher by 42.22 percent whereas potato prices rose by 43.25 percent.

Martin Beck, lead United Kingdom economist at Oxford Economics, said: "Although we think that 2018 as a whole will see a steady decline in price pressures, March may have proved an exception to that".

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