Wholesale inflation surges to 12-month high at 1.26%

India's Wholesale Price Index (WPI)-based inflation on annual rate surged to a 12-month high at 1.26% for April 2024, up from 0.53% in March 2024 and 0.20% in February 2024, according to the latest data shared by the Ministry of Commerce & Industry. The month-over-month change in the WPI index for the month of April 2024 stood at 0.79 % as compared to March 2024.

The union ministry attributes the surge in wholesale inflation in April 2024 to an increase in prices of food articles, electricity, crude petroleum & natural gas, food products, and other manufacturing products.

The wholesale inflation in primary articles surged to 5.01% in April 2024, up from 4.51% in March 2024 and 4.55% in February 2024, the data shows. The WPI inflation in the fuel & power category surged to 1.38% from negative (-) 0.77% in March and -1.71% in February.

The manufactured products saw wholesale inflation at -0.42% in April, -0.85% in March, and -1.27% in February 2024. The Food Index, which has a weightage of 24.38%, saw the inflation rising to 5.52% in April, up from 4.65% in March, and 4.14% in February. The Food Index consisting of 'food articles' from the primary articles group and 'food product' from the manufactured products group increased from 180.1 in March 2024 to 183.6 in April 2024.

The wholesale inflation for crude petroleum and natural gas surged to 4.97% in April against 1.67% in March.

While wholesale inflation recorded a significant jump, retail inflation of the country eased further. According to the government data released on Monday, India's retail inflation eased further to 4.83% in April 2024, down from 4.85% in March 2024. The corresponding inflation rates for rural and urban areas are 5.43% and 4.11%, respectively. The CPI inflation for January and February stood at 5.10% and 5.09%, respectively.

Among the top five groups, the year-on-year inflation on groups ‘clothing & footwear’, ‘housing’ and ‘fuel & light’ decreased since last month. While inflation has come down significantly in the past few months, it remains above the 4% target.

Despite a fall in the overall retail inflation in April 2024, the food inflation surged to a four-month high at 8.70%, up from 8.52% in March 2024, thus contributing to high food prices. Food inflation remains elevated across both rural and urban India. The food inflation in rural areas rose to 8.75% in April from 8.55% in March, while in urban areas, the food inflation surged to 8.56% from 8.41%.