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      Question

      According to wholesale inflation data, what was the

      level of core inflation (excluding food and fuel) recorded in January?
      A 1.4% Correct Answer Incorrect Answer
      B 2.0% Correct Answer Incorrect Answer
      C 2.6% Correct Answer Incorrect Answer
      D 3.2% Correct Answer Incorrect Answer
      E 4.1% Correct Answer Incorrect Answer

      Solution

      Core inflation, which excludes volatile food and fuel prices, surged to 3.2 percent in January, marking the highest level in 38 months. This represented a significant increase from 2 percent recorded in December. Core inflation reflects underlying price pressures in the economy that arise from factors such as production costs, commodity prices and currency movements. The increase in core inflation was attributed mainly to hardening global commodity prices and exchange rate movements affecting the rupee-dollar value. A rise in core inflation often indicates persistent inflationary pressures beyond temporary food price fluctuations.

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