How did the CPI and WPI inflation for the month of Feb-22 pan out last week and what are the implications of these numbers?

For the month of Feb-22, the CPI inflation and WPI inflation came in higher than expected. Against the Reuters consensus estimate of 5.93% for retail inflation, the actual inflation came in at 6.07%. If oil prices were one reason, CPI inflation was also driven up by food and core inflation. Food inflation spiked by 45 basis points to 5.85% while core inflation came in close to 6.2%. This indicates pressure on items like clothing, footwear, housing, health etc.

Let me now turn to the WPI inflation. Reuters had pegged WPI inflation for Feb-22 at 12.15% but instead it came in higher at 13.11%. The biggest pressure on WPI inflation came from fuel prices, with crude rallying sharply 25% in Feb-22. There was also a sharp increase in prices of other key inputs like minerals and chemicals. Indian companies could witness sharp spike in input cost in Q4, putting further pressure on operating margins.