WPI inflation rises to 3.18 pc in April on costlier fuel, fruits

Ivan Schwartz
May 15, 2018

On a YoY basis, last month's increase in the CFPI rate was much higher than the 0.61 per cent rise during April 2017.

On Saturday, the government issued a press release that the base year for calculating the wholesale price index had been changed from 2004-'05 to 2011-'12.

Similarly, the inflation in the fruit basket was higher at 9.65 per cent compared to 5.78 per cent in the previous month. Within the Index, growth in the food and beverages segment slowed marginally to 3% in April from 3.08% in March. Fruits grew costlier by 19.47%, and onion by 13.62%. However, the LPG prices continued to drop at a faster rate of 11 per cent. Inflation in manufactured products remained at 3.11 per cent. Monday's data is the final price print issued before the Reserve Bank of India's policy review slated on June 6. With this, WPI has surged to 3-month high in the latest month.

The government CPI (consumer price index) data showed food price inflation unchanged at 2.8 per cent in April, while the prices of pulses and product fell for the seventh straight month to 12.35 per cent.

The index for the primary articles group rose by 1.4 per cent to 129.2 from 127.4 for the previous month. The CSO data further revealed that inflation in the fuel and light segment also came in lower at 5.24% month-on-month basis.

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Inflation rate for "fuel and power" group rose sharply to 7.85 per cent in April from 4.70 per cent in March reflecting a rise in price of domestic fuel in line with increase in global crude oil rates.

Other categories, however, recorded an increase in inflation.

"The housing and rising oil prices are likely to keep pressure on headline inflation in coming months".

Yes Bank's Chief Economist Shubhada Rao also higher inflation in with worldwide crude prices firming up as well as MSP-led higher food inflation.

Reacting to the WPI data, industry body Assocham pointed out that petrol and diesel inflation stood out as the "main worry area". "The trajectory of RBIs policy in remainder of FY19 will be governed by the movement of oil prices".

Other reports by GizPress

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