Wholesale inflation rises to 13-month high of 1.26%

New Delhi: April 2024 saw wholesale inflation reaching a 13-month high of 1.26 per cent, driven by escalating food prices, particularly vegetables. This surge comes as the Reserve Bank of India (RBI) is expected to maintain interest rates in the upcoming policy review.

The Wholesale Price Index (WPI) based inflation has been on an upward trajectory for two consecutive months, registering 0.20 per cent in February and 0.53 per cent in March. In comparison, the WPI inflation was at a lower 0.79 per cent in April of the previous year.

The inflation rate for April 2024 marks a 13-month peak, with the last significant high recorded in March 2023 at 1.41 per cent.

The Ministry of Commerce & Industry attributed the positive inflation rate in April 2024 to the surge in prices of food articles, electricity, crude petroleum and natural gas, and manufactured food products, among others.

Data reveals that inflation in food articles escalated to 7.74 per cent in April from 6.88 per cent in March. In the fuel and power segment, inflation rose to 1.38 per cent in April, a significant increase from the deflation of 0.77 per cent in the preceding month.

Within the food articles category, inflation for vegetables soared to 23.60 per cent in April, up from 19.52 per cent in the previous month. Inflation rates for potato and onion also saw a substantial rise, with potato inflation jumping to 71.97 per cent in April from 52.96 per cent in March, and onion inflation increasing to 59.75 per cent in April from 56.99 per cent in March.

Contrastingly, manufactured products experienced deflation of 0.42 per cent in April, a decrease from the deflation of 0.85 per cent in March.

Interestingly, the rise in April’s WPI contrasts with the retail inflation data for the same month. The RBI, which primarily considers retail inflation while formulating monetary policy, reported an 11-month low of 4.83 per cent in retail inflation for April.

In its last meeting, the RBI maintained the interest rate for the seventh consecutive time, expressing vigilance towards potential risks to food inflation.

The RBI’s interest rate-setting panel is set to convene for its next meeting from June 5-7.