WPI inflation hits record 15.08% in April on costlier food, fuel


PTI | New Delhi | Updated: 17-05-2022 19:00 IST | Created: 17-05-2022 17:50 IST
WPI inflation hits record 15.08% in April on costlier food, fuel
Representative Image Image Credit: ANI
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Wholesale price-based inflation shot up to a record high of 15.08 percent in April after the heatwave led to a spike in prices of perishables such as fruits and vegetables, bolstering the possibility of RBI raising the interest rate next month.

The Wholesale Price Index (WPI)-based inflation at 15.08 percent is the highest print on record in the current (2011-12) series.

This is the 13th month of double-digit inflation and arguments of a low base no longer hold.

Considering the old series as well, the last time WPI inflation was higher than this was in August 1991, when it was at 16.06 percent.

All sub-heads (food, fuel, and manufacturing) registered an acceleration in inflation in April with fuel and power inflation noting the sharpest increase.

''The high rate of inflation in April 2022 was primarily due to a rise in prices of mineral oils, basic metals, crude petroleum & natural gas, food articles, non-food articles, food products, and chemicals & chemical products, etc. as compared to the corresponding month of the previous year,'' the commerce and industry ministry said in a statement.

Inflation in food articles was 8.35 percent as prices of vegetables, wheat, fruits, and potato witnessed a sharp spike over the year-ago period.

The rate of price rise in vegetables was 23.24 percent, while in potatoes it was 19.84 percent, fruits (10.89 percent), and wheat (10.70 percent).

Core inflation accelerated for the third consecutive month to 11.1 percent from 10.9 percent in March 2022. Manufactured product inflation was also up at 10.9 percent in April from 10.7 percent in March.

Inflation in food articles was 8.35 percent as prices of vegetables, wheat, fruits, and potato witnessed a sharp spike over the year-ago period.

In the fuel and power basket, inflation was 38.66 percent, while in manufactured products and oilseeds, it was 10.85 percent and 16.10 percent, respectively.

Inflation in crude petroleum and natural gas was 69.07 percent in April.

Data released last week showed that retail inflation rose to a nearly eight-year high of 7.79 percent in April, remaining above the Reserve Bank's inflation target for the fourth straight month.

''With WPI inflation remaining solidly in double-digits, the probability of a repo hike in the June 2022 review of monetary policy has risen further,'' said Aditi Nayar, Chief Economist, ICRA Ltd.

''We expect a 40 basis points hike in June 2022 followed by a 35 basis points rise in August 2022, amidst a terminal rate of 5.5 percent to be reached by mid-2023.'' The central bank had earlier this month hiked the key interest rate by 40 basis points to 4.40 percent and the cash reserve ratio by 50 basis points to tame stubbornly high inflation.

''With the source of inflation being global supply issues and not exuberant domestic demand, we maintain our view that over-tightening will douse the fledgling recovery without having a commensurate impact on the origins of inflationary pressures,'' Nayar added.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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