Crisil core inflation tracker: Fuel prices soften, but metal prices harden

Food inflation could stay under check if the monsoon is again adequate and global food prices stay benign

Wholesale Price Index (WPI)-based inflation eased for the third straight month in February, dropping to 2.5 per cent from 2.8 per cent. The gauge is a good 150 bps below its November 2017 peak, and has slid with food (mainly primary food articles) and fuel inflation (mainly mineral oils). 

Contrastingly, manufacturing inflation edged up with metal prices. So far, this financial year (April to February), WPI inflation has averaged 2.9 per cent compared to 1.4 per cent in the corresponding period a year ago. While higher metal and oil prices put upward pressure, falling food inflation capped the upside. Food inflation