Wholesale inflation reaches 13-mth high

A lot of commodity prices have shown an uptrend in last few months, including the crude oil prices that we saw in April. As of now what we have seen in commodity prices, I would expect the WPI to move up further and cross 2% in the next 2 months of May and June - Aditi Nayar, chief economist at ICRA

New Delhi: The wholesale inflation rose to a 13-month high of 1.26 per cent in April fuelled by rising prices of food articles, especially vegetables, amid expectations of RBI holding interest rates in the policy review next month. The wholesale price index (WPI) based inflation has been rising for two months in a row. It was 0.20 per cent in February and 0.53 per cent in March. WPI inflation was 0.79 per cent in April last year. The April WPI print is at a 13-month high. The last high was seen in March 2023, when inflation was 1.41 per cent.

“Positive rate of inflation in April 2024 is primarily due to increase in prices of food articles, electricity, crude petroleum and natural gas, manufacture of food products, other manufacturing etc,” Ministry of Commerce & Industry said in a statement on Tuesday. As per the data, inflation in food articles rose to 7.74 per cent in April as against 6.88 per cent in March. In the fuel and power basket, inflation stood at 1.38 per cent in April, up from (-) 0.77 per cent in the previous month.

ICRA Chief Economist Aditi Nayar said WPI inflation is heavily sensitive to global commodity prices which is undergoing upturn year after year. “A lot of commodity prices have shown an uptrend in last few months, including the crude oil prices that we saw in April. As of now what we have seen in commodity prices, I would expect the WPI to move up further and cross 2 per cent in the next two months of May and June,” Nayar said.

ICRA forecasts average WPI for current fiscal at 3.3 per cent.