Coal news and updates

March WPI inflation hits 3-month high of 5.70%

April 15: India's wholesale price inflation hit a three-month high in March, snapping an easing trend.

The wholesale price index (WPI), long regarded as India's main inflation measure, rose a much faster-than-expected 5.70% last month from a year earlier, on higher food, fuel and manufacturing costs. It was the quickest pace since December 2013 and snaps a three-month easing trend.

In February, wholesale prices rose 4.68%, their slowest pace in nine months.

The reading for January WPI inflation was also revised up to 5.17% from 5.05% earlier.

After raising lending rates three times since last September, the Reserve Bank of India (RBI) left its policy repo rate unchanged at 8% this month.

Industry experts feel the RBI is likely to stay concerned on the inflation outlook and stick to the tight policy stance.  

They say policy bias will be for further rate hikes in the second half of FY’14-15 when the potential El Nino development and impact on southwest monsoon become more apparent.

India has been battling a prolonged spell of high inflation and low growth. While economic growth has almost halved to below 5% for the past two years, the worst slowdown for the South Asian nation since the 1980s, retail inflation has been averaging around 10%.

A sharper-than-expected cooling in vegetable prices in the past three months had raised hopes of breaking out of that spell. But recent unseasonal hail and heavy rains in parts of the country have damaged crops and driven up food prices again.

A continuing slump in investment and consumer demand resulted in a surprise 1.9% annual contraction in industrial output in February. Exports fell for a second straight month in March, widening the trade deficit to a five-month high.