Moneycontrol
Last Updated : May 14, 2018 02:08 PM IST | Source: Moneycontrol.com

Wholesale inflation hits 4-month high at 3.18% in April

WPI witnessed a growth of 2.47 percent in March and 3.85 percent April 2017

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India's wholesale inflation grew 3.18 percent in April hitting a 4-month high as prices of some vegetables as well as petrol, diesel soared, latest price data released by the commerce and industry ministry showed.

Wholesale inflation rate, measured by Wholesale Price Index (WPI), is a marker for price movements in bulk buys for traders and broadly mirrors trends in shop-end prices.

WPI witnessed a growth of 2.47 percent in March and 3.85 percent April 2017.

“The increase was due to cereals deflation turning in inflation, increase in fruits and vegetables and fuel inflation in April, 2018 over March, 2018. Higher inflation in April was also due to base effect, inflation in April 2017 declined to 3.9 percent from 5.1 percent in March, 2017,” Dr. Devendra Kumar Pant, Chief Economist, India Ratings & Research said.

Primary articles, which accounts for more than a fifth of the entire wholesale price index, grew 1.41 percent in April from 1.03 percent year a percent ago and 0.24 percent in March.

Prices of vegetables fell 0.89 percent compared to fall of 0.81 percent in April 2017 and fall of 2.7 percent in March. Onion, potato, fruits and milk prices continued to rise in April.

Prices of non-food articles fell 1.81 percent in April, compared with (-) 0.08 percent a year ago and a contraction of (-) 1.39 percent in March.

Prices of pulses have continued to slump at (-) 22.46 percent in April as compared with a de-growth of 20.58 percent in March and (-) 13.64 percent a year ago.

“Weakness in prices of pulses and onions, as well as sugar, was offset by a sharp month-on-month rise in other perishables, in line with the seasonal trend at the start of the summer months. Nevertheless, primary food inflation remained subdued at 0.9% in April 2018,” Aditi Nayar, Principal Economist at ICRA said.

Fuel and power inflation, which has a weightage of 13.15 percent in WPI, grew at 7.85 percent in April from 4.70 percent in March, and 17.11 percent a year ago.

Moving ahead, Nayar, expects WPI inflation to continue to rise over the remainder of the quarter-ended June.

“Key factors that would influence the inflation trajectory include the level at which global crude oil prices stabilise and the extent to which they are transmitted to domestic fuel prices, the early trend in the monsoon dispersion and the extent of change in MSPs,” Nayar said.
First Published on May 14, 2018 12:12 pm
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