Wholesale price growth hits record high of 15.1% in April

Wholesale price inflation reached 15.1% in April, the highest in the current data series, up from 14.5% in March, largely a . operated by Rise in fuel prices and food itemsEspecially perishable items like fruits, vegetables and milk.

The previous high inflation rate recorded in the current series of Wholesale Price Index (WPI) with the base year of 2011-12 was 14.9% in November 2021. There was no base effect at work as wholesale price inflation stood at 10.74 last April. ,

“All-time high level of wholesale price inflation in April was driven by increased prices along with manufactured products and fuel and power,” said Rajni Sinha, chief economist, CARE Ratings. Producers are expected to pass on rising costs to consumers which could push retail inflation even higher from the 95-month high of 7.8% recorded in April.

Fuel and power inflation climbed to 38.66% in April, from 34.5% in March, while manufactured products inflation rose slightly to 10.85% from 10.7% and food price inflation rose from 8.7% to 8.9%. The primary article was the only group to see a decline in the inflation rate, but declined from just 15.54% in March to 15.45% in April.

Within fuel and electricity, inflation in LPG was recorded at 38.48%, while that of petrol and diesel registered a growth of 60.6% and 66.1%, respectively.

Inflation of potato in food articles stood at 19.8%, while that of vegetables stood at 23.2%. Fruit prices registered an inflation of 10.9 per cent, slightly higher than the 10.6 per cent reported in March, while wheat prices rose by 10.7 per cent, from 14.04 per cent in March, according to official data.

Heatwave drives up perishable goods prices ICRA Chief Economist Aditi Nair said the rise in prices of fruits, vegetables and milk such as tea pushed up primary food inflation. Core-WPI inflation, which excludes food and fuel items, hit a four-month high of 11.1% in April, as producers were forced to pass on input price pressures, he said.

ICRA said some correction in commodity prices due to a fall in demand in China could help offset the depreciation of the rupee and keep wholesale price inflation below 15% in May, but it is still ‘inconvenient’. will be ‘high’.

The government attributed the high rate of inflation in April 2022 ‘primarily’ to “increased prices of mineral oils, base metals, crude petroleum and natural gas, foodstuffs, non-food items, food products and chemicals and chemical products”. held responsible for ,

The inflationary trend since April, when retail inflation also touched an eight-year high of 7.8%, coupled with fresh interest rate hikes in June is expected to prompt the central bank to tighten monetary policy further. Economists, however, do not agree that this can help curb price hikes.

“While the sources of inflation are global supply issues and not excessive domestic demand, we maintain our view that a further tightening without a corresponding effect on the origin of inflationary pressures will reduce fledgling recovery,” Ms Nair said.

an SBI report What can be linked to about three-fifths of India’s retail inflation since February? Ukraine-Russia conflict Therefore a hike in interest rates by the central bank may not be able to ‘significantly’ pacify the prices. ,