The wholesale price-based inflation (WPI) rose sharply to 2.03 percent in January on costlier non-food manufactured items and experts are projecting further uptick in the rate of price rise in the next few months.

While food articles saw softening in inflation, the sharp rise in the WPI inflation in January was led by manufactured non-food products, fuel and power, and crude petroleum and natural gas, data released by the Commerce and Industry Ministry showed on Monday.

The WPI inflation was 1.22 percent in December 2020 and 3.52 percent in January last year. Core inflation rose to a 27-month high of 5.1 percent in January 2021.

Food inflation in January stood at (-) 2.8 percent, against (-) 1.11 percent in the previous month. In vegetables and potatoes, it was (-) 20.82 percent and 22.04 percent respectively.

In non-food articles, inflation was higher at 4.16 percent, while in the fuel and power basket it was (-) 4.78 percent, during the month under review.

Petroleum product prices have reached historic highs as international crude prices surged in recent months and the high indirect taxes remain, both in the Centre and States. These, along with the sharp increase in industrial raw material prices have resulted in a broad-based increase in prices of services and manufacturing products in recent months.

The RBI in its monetary policy decision on February 5, kept interest rates unchanged for the fourth consecutive meeting and said that the outlook for core inflation is influenced by the escalation in cost-push pressures seen in recent months.

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