Moreover, the retail inflation eased to 4.28 per cent, a five-month low in March, but remained above RBI's medium-term target, supporting views that monetary policy is likely to remain unchanged at the next review in early June.
Given the expectations of more moderate GDP growth and inflation of 5.2% and 2.5%, respectively, in 2018, the research house does not envisage further hikes in the Overnight Policy Rate (OPR) this year. The index for "Manufacture of Wearing Apparel" sub-group declined by 0.9 per cent to 137.8 from 139.0 for the previous month due to lower price of woven apparel, except fur apparel, and knitted and crocheted apparel (1 per cent each).
Product-wise, the price of high-speed diesel rose by 6.12 per cent during March while that of petrol climbed by 2.55 per cent and for LPG by (-) 9.08 per cent.More news: Bruce McArthur faces 8th murder charge; alleged victim from Sri Lanka
A consensus of economists forecast the Office for National Statistics' (ONS) Consumer Price Index (CPI) to come in at 2.7 per cent for March, in line with February's reading and holding below the 3 per cent recorded in January.
Similarly, the protein-based food items such as eggs, meat and fish became cheaper by (-) 0.82 per cent during the month. This was mainly driven by the sharp correction in prices of vegetables, he said. However, the March 2018 inflation is higher than 3.89 per cent recorded in the same month past year.
Core inflation dropped to 3.5 per cent in March 2018 from 3.9 per cent in February 2018.More news: March Retail Sales Rose 4.5% YOY
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. "It may be too early draw any inference from such movement, the divergence suggests that impulse of demand recovery at the moment is being felt at the retail level and not so much at the wholesale level", said Mr Sinha. The index for electricity group rose by 2.9 per cent to 105.4 (provisional) from 102.4 (provisional) due to higher price of electricity (3 per cent).
Aditi Nayar, Principal Economist, ICRA said: "A downturn in food and mineral prices helped to offset the unfavourable base effect and keep the wholesale inflation steady at 2.5 per cent in March 2018".More news: Bank of America's once-giant mortgage business is now 'other'