India’s Wholesale Price Index (WPI) inflation eased to a 13-month low of 0.85% in April, down from 2.05% a month ago. This was due a broad-based fall in prices of all commodities.
Food inflation, consisting of 'food articles' from primary articles group and 'food product' from manufactured products group, decreased from 4.66% in March to 2.55% in April.
The manufactured products inflation eased to 2.62% in April from 3.07% in March, and primary articles inflation fell to (-)1.44% from 0.76%. Inflation of fuel & power too ebbed to (-)2.18% in April from 0.20% a month back.
The easing in WPI comes close on the heels of India's retail inflation cooling to a 68-month low of 3.16% for April, data for which was released on Tuesday.
On a month-on-month basis, the overall index of WPI fell 0.2% on month, driven by a decline in prices of 'primary articles' and 'fuel & power'. But the indices of food and manufactured products rose by 0.3% and 0.4%, month-on-month, respectively.
During April, the WPI inflation of vegetables was at (-)18.26%, the sharpest pace of decline recorded since October 2023. In addition, the inflation of pulses was at (-)5.57%, the lowest rate seen since October 2018.
“Even the cereals inflation was down to a 42-month low of 3.8% due to better kharif output. The easing food inflation would help in bringing relief to households and the consumption demand as we begin the new fiscal,” noted Paras Jasrai, senior analyst, India Ratings and Research (Ind-Ra).
Economists say the temporary lowering of tariffs by the US and China have helped in controlling the heightened uncertainty and volatility in the global economic environment and improving investor sentiments. This has led to a correction in precious metal prices along with an increase in energy prices.
However, the prices remain benign and are expected to be so in the ongoing fiscal as per the latest commodity outlook by the World Bank, they say. Most analysts feel that muted commodity prices along with a favorable base effect for food segment would keep the wholesale inflation around 0.5% in the near term.
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