WPI inflation rises for second consecutive month to 13-month high of 1.26%

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Wholesale inflation rose for the second consecutive month in April to 1.26 per cent. “Positive rate of inflation in April 2024 is primarily due to increase in prices of food articles, electricity, crude petroleum and natural gas, manufacture of food products, other manufacturing etc” Ministry of Commerce & Industry said in a statement on Tuesday. As per the data, inflation in food articles rose to 7.74 per cent in April. While,  inflation in vegetables was 23.60 per cent. Wholesale food and vegetables inflation have now risen continuously for at least last two months.

While, in the fuel and power basket, inflation stood at 1.38 per cent in April. Wholesale Price Index (WPI) based inflation data is in sharp contrast with Consumer Price Index based inflation which the NSO published on Monday, May 13, 2024. Retail inflation data showed that inflation has fallen for a fourth consecutive month to an 11-month low of 4.83 per cent in April 2024. But conversely, WPI based inflation has increased consecutively in the last two months. On one side retail inflation fell to 11 month low levels in April, while, on the other hand, the wholesale inflation has reached to 13 month high in April.

The Reserve Bank of India (RBI) has kept eagle eyes on inflation trajectory in the country. However, the apex bank mostly takes into account CPI-based inflation to formulate monetary policy decisions. Due to the high prices of food items especially veggies,  the RBI has kept repo rate unchanged in last seven of its meetings in the recent past. The apex bank controls inflation in the country via repo rate which remains unchanged at 6.50 per cent. There are speculations when would the central bank begin rate cut regime. But since vegetable inflation continues to remain at worrisome levels as highlighted in CPI and WPI based inflation data. April retail inflation in vegetables was 27.80 per cent.