India's wholesale price index increased by 6.55 percent on the year in February, up from 5.25 percent in January. This is the biggest year-on-year increase in the WPI since late 2013. The index rose 0.49 percent on the month in February after an increase of 0.98 percent in January.
Wholesale fuel prices, which account for around 15 percent of the index, again made a significant contribution to the increase in headline WPI inflation. These prices increased by 21.02 percent on the year in February, up from 18.14 percent in January and 8.65 percent in December. Petrol prices rose 16.72 percent on the year , up from 15.66 percent in January, while diesel prices rose 33.14 percent, up from 31.1 percent.
Wholesale prices for food (around 14 percent of the index) also strengthened in February after they had declined on the year in both December and January. These declines were largely driven by sharp falls in perishable food prices after cash shortages prompted distress sales following the Indian government's decision in November to withdraw high-denomination notes as currency. Vegetable prices continued to fall in February, down 8.05 percent on the year, but firmed significantly after dropping by 32.32 percent on the year in January. This helped to push wholesale food price inflation up from a fall of 0.56 percent in January to an increase of 2.60 percent in February.
Offsetting the stronger gains in fuel and food prices, year-on-year growth in wholesale prices for manufactured goods (around 65 percent of the index) moderated from 3.99 percent in January to 3.66 percent in February.
Consumer price index data for February is scheduled for release later today.