In World Economy News 15/01/2016
The pace of decline in India’s wholesale-price index slowed in December as costlier lentils and vegetables helped offset broader deflationary pressures, government data showed Thursday.
The index fell 0.73% from a year earlier, compared with November’s 1.99% fall. The decline was less than economists’ forecast of a 1% drop.
Prices of lentils rose 55.6% from a year earlier in December, following November’s 58.2% increase. Vegetable prices too were up 20.6% from a year earlier as below-average monsoon rainfall for the second successive year hurt crops.
Fuel prices, however, fell 9.2%, extending a decline over the past several months driven by declining global crude oil prices.
Despite an over yearlong fall, the latest wholesale prices data are unlikely to stoke any immediate concern as policymakers are focused on the more closely-tracked consumer prices numbers, which continue to show a steady rise.
Government data issued Tuesday showed consumer inflation accelerated to 5.61% from a year earlier in December due to higher food prices. It increased for the fifth month in a row–consumer inflation was at 5.41% in November.
Still, it remains below the 6% target for January set by the Reserve Bank of India, helping bolster expectations that the central bank would resume lowering interest rates this year to support a fragile economic recovery.