Wholesale price growth accelerates to 14.55% in March


India’s wholesale price inflation hit a four-month high of 14.55% in March, up from 13.11% in February, on the back of accelerating price increases across commodity categories, with fuel & electricity and primary items making up the bulk of gains.

This is the 12th month in a row that wholesale inflation has stayed above 10%. While retail inflation hit a 17-month high of 6.95% in March, mainly due to higher food prices, the wholesale food price index edged up to 8.71% in March from 8.47% in February.

Fuel and electricity inflation rose to 34.52% in March, compared to 31.5% in February, while primary item inflation accelerated to 15.54% from 13.39%. The month-to-month increase in fuel and electricity index was 5.68% while in primary items it was 2.1%.

Wholesale price inflation, which stood at 7.89% in March 2021, had hit a record high of 14.9% in November 2021 and stood at 14.3% in December. In January and February it had fallen below the 14% mark.

High inflation this March was “mainly attributed to increases in prices of crude oil and natural gas, mineral oils, base metals, etc. due to disruptions in the global supply chain due to the Russia-Ukraine conflict,” according to the economic adviser’s office. Ministry of Industry and Domestic Trade Promotion said in a statement.

ICRA chief economist Aditi Nayar ended the broad-based rise in wholesale inflation “higher-than-expected,” saying the rise in crude oil prices was the biggest factor behind the rise in inflation in March compared to February, followed by fuels and core items.

“We expect April wholesale price index (WPI) inflation to remain in the 13.5% to 15% range, depending in part on where crude oil prices end up for the rest of April 2022 and how high gasoline and diesel prices are further revised,” she says.

Even core inflation, which excludes volatile energy and food prices, hardened a strong 2.2% to 10.9% in March versus February 2022. “Only four of the 21 sub-groups of the core index escaped monthly increases in March 2022, namely beverages, other transportation equipment, apparel and pharmaceuticals,” stressed Ms. Nayar.

Inflation in processed products rose to 10.71% from 9.84%. However, the monthly change in the industrial goods index was stronger at 2.31%.

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