The silver lining to the cloud is the improvement in public finances and the decline in international crude prices, and consequently in domestic prices of petroleum products. Excluding the beneficial effect of this softening of fuel prices results in inflation exceeding the headline in terms of wholesale prices.
globally too, headline inflation has been moderating mainly on account of the decline in international crude prices, while core inflation has generally remained firm and is likely to shape inflation expectations. India’s interface with the global economy has been another distinguishing feature of macroeconomic developments.