Wholesale Inflation Hits 11-Month Peak Amid Rising Crude Prices

Wholesale price inflation reached a nearly one-year high of 2.13% in February, driven by increased prices in food and non-food sectors despite a drop in vegetable prices. Economists warn further increases if oil prices remain high, impacting goods like fertilizers and metals. The US-Iran war affects inflation.

Wholesale price inflation rose to an 11-month peak, reaching 2.13% in February, fueled by rising costs in both food and non-food sectors, as reported by government data on Monday. Despite a reduction in vegetable prices, food inflation still saw an uptick, with notable increases in pulses, potatoes, and fish.

Economists suggest the ongoing surge in crude oil prices could lead to further inflationary pressures, especially if geopolitical tensions, such as the US-Iran conflict, persist. The Wholesale Price Index (WPI) inflation, which closely follows global price trends, is expected to reflect this increase noticeably in March.

Rajeev Juneja, President of PHDCCI, emphasized the importance of improving supply-chain efficiencies and supporting domestic manufacturing to combat these cost pressures. Meanwhile, the Reserve Bank of India (RBI) has maintained reduced policy interest rates due to low overall inflation rates.

(With inputs from agencies.)