This marks the highest inflation rate in the current series, beating the 14.9% recorded in November 2021
This marks the highest inflation rate in the current series, beating the 14.9% recorded in November 2021
Wholesale price inflation hit 15.1% in April, the highest in the current series, from 14.5% in March, mainly driven by increases in fuel prices and food, particularly perishables such as fruit, vegetables and milk .
The previous high inflation rate recorded in the latest series of the wholesale price index (WPI) with a base year of 2011-12 was 14.9% in November 2021. There was no base effect as wholesale price inflation was 10.74% last April.
Fuel and energy inflation hit 38.66% in April, up from 34.5% in March, while manufactured goods inflation edged down from 10.7% to 10.85% and food price inflation from 8.7% to 8.9% rose. Primary items were the only group to see the inflation rate fall, but it only fell from 15.54% in March to 15.45% in April
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In fuel and electricity, LPG inflation was recorded at 38.48%, while gasoline and diesel saw a price increase of 60.6% and 66.1%, respectively.
In food, potato inflation was 19.8%, while vegetable inflation was 23.2%. Fruit prices posted inflation of 10.9%, slightly higher than the 10.6% reported in March, while wheat prices rose 10.7%, slowing from 14.04% in March, according to official data.
The heatwave pushed up the prices of perishable goods such as fruits, vegetables and milk, which along with a rise in tea prices, pushed up inflation in staple commodities, ICRA chief economist Aditi Nayar said. Core WPI inflation, which excludes food and fuel, also hit a four-month high at 11.1% in April as producers were forced to pass on pressure on input prices, she added.
Demand pullbacks in China, leading to some correction in commodity prices, could help offset the rupee’s depreciation and push wholesale price inflation below 15% in May, but it would still be “uncomfortably high,” ICRA estimated.
The government attributed the high rate of inflation in April 2022 “mainly” to “the rise in prices of mineral oils, base metals, crude oil and natural gas, food items, non-food items, food products, and chemicals and chemical products.” .
The inflation trend from April, when retail inflation also hit an eight-year high of 7.8%, should spur the central bank to further tighten monetary policy with renewed rate hikes in June. However, economists are not convinced that this could help contain the price increase too much.
“As the source of inflation is global supply problems and not buoyant domestic demand, we maintain our view that tightening too much will wipe out the fledgling recovery without having a commensurate impact on the origins of inflationary pressures,” Ms Nayar said.
An SBI report on Monday said nearly three-fifths of the rise in Indian retail inflation since February could be linked to the Ukraine-Russia conflict, so rate hikes by the central bank may not be able to keep prices “reasonable.” “ to cool off. ‘
