Wholesale Price Inflation spikes to four month high in March

Inflation based on Wholesale Price Index (WPI) increased to a four ­month high of 14.55 % in March, mirroring a broad-based spike in global commodity prices, especially oil in the wake of the Russia-Ukraine crisis, showed official data released on Monday.

There was some softening in food articles month­-on-­month led by vegetables and pulses, though wheat, paddy, potato, milk, egg, meat and the fish basket saw moderate increases during March. During this period, inflation in food articles eased to 8.06 % from 8.19 %. Vegetable inflation was 19.88 % against 26.93 %.

The manufacturing inflation was increased to 10.7 % in March from 9.8 % in February. Edible oils inflation increased to 16.06 % from 14.9 %, remaining in double digits for 28 months. Even core inflation remained sticky and moved to 10.9 % in March. This was led primarily by the uptick in inflation of basic metals, chemicals and textiles.

The price pressure at the wholesale level far outweighs a rise in retail inflation, hit a 17-month high of 6.95% in march, having breached the upper band of the Reserve Bank of India’s target of 2-6% for a third straight month. Most of the analysists are expect the RBI to start rate hike cycle in June, when the monetary policy will be reviewed next.

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