Wednesday, 23 May, 2018

WPI inflation falls to 2.47% in March on cheaper food prices

WPI inflation falls to 2.47% in March on cheaper food prices WPI inflation falls to 2.47% in March on cheaper food prices
Nellie Chapman | 17 April, 2018, 00:30

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

The Wholesale Price-Indexed (WPI) inflation of the country slipped marginally to 2.47 per cent in March from 2.48 per cent reported for the previous month because of falling prices of food items, especially vegetables and pulses. The "market consensus" is for a 0.5 percent q/q rise in prices on Thursday - 0.1 percent lower than the central bank's forecast.

The index for fuel and power declined by 0.1 per cent to 98 (provisional) from 98.1 (provisional) in February.

The Department of Statistics is set to announce March inflation on Wednesday. Compared to March 2017, food prices were 1.1 per cent higher, while non-food and services prices rose by 1.2 per cent and 4.6 per cent, respectively.

"This seems to signal that the pass-through of costs from businesses to consumers may be limited and, hence, less likely to be a source of consumer inflationary pressure", said its head of research Kristina Fong. "We expect the average WPI inflation to rise to 3.9 per cent in 2018-19 from 2.9 per cent in 2017-18", Nayar said.

"Despite our base-case assumption, Bank Negara Malaysia's future actions are expected to be data-dependent". According to government data, WPI inflation in March was more than double at 5.11 per cent.

Britons are believed to have benefited from slightly weaker food prices, which had surged on the back of the weaker pound, as well as a bigger month-on-month drop in fuel prices than a year earlier. The retail inflation slowed down mainly on account of easing food prices including vegetables. The movement in core inflation at the retail and wholesale level were in the opposite direction in March 2018.

The CSO data revealed that the consumer food price index (CFPI) stood at 2.81 per cent in March compared to 3.26 per cent in February 2018.

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

As per the official government data released Monday, food articles showed deflation at 0.29 per cent in March as against a 0.88 per cent inflation in the preceding month.