India's WPI inflation hits all-time high at 10.49% in April

New Delhi: The wholesale price index across the country rose to an all-time high of 10.49 per cent in April, the data released by the Ministry of Commerce & Industry showed. A low base of April last year also contributed to the sharp rise in inflation last month.

The wholesale price inflation jumped to double digits in April as pricing pressure built up due to rising oil and commodity prices, reflecting strong cost-push pressures.

The wholesale price index (WPI) grew 7.39 per cent during the month of March, while the WPI for February was revised to 4.83 per cent from 4.17 per cent, the data showed. The WPI in April 2020 was at (-)1.57 per cent.

“The annual rate of inflation in April 2021 is high primarily because of rise in prices of crude petroleum, mineral oils viz petrol, diesel etc, and manufactured products as compared the corresponding month of the previous year,” the ministry statement said.

Rumki Majumdar, Economist, Deloitte India, said: "We expect prices to ease over the next few months because of low demand. However, upside risks are significant because of rising global commodity prices, including crude oil prices, with increased global activities, especially in the US and China. Global inflation will result in higher import prices. At the same time, rising transportation expenses due to intermittent lockdowns and shipping rates will also add to input costs."

"Inflation is expected to sharply increase once the economy returns to the recovery path. Uncertainties have resulted in the postponement of capital spending and investment, which will translate into supply constraints in the near term. Post recovery, pent-up demand is expected to rise sharply and result in demand-push inflation, thereby,  limiting RBI’s ability to maneuver monetary policy," she added.

The consumer price inflation or the CPI eased in April to 4.29 per cent driven down by fall in food prices.

While food inflation rose to 4.92%, inflation for fuel and manufacturing items increased to 20.94% and 9.01% respectively.

While vegetable prices pulled the index down, protein-based food items like pulses, egg and meat witnessed hardening of prices.

Retail inflation, measured by the Consumer Price Index (CPI), eased to 4.29 per cent in April on decline in food prices, data released last week showed.

Reserve Bank of India Governor Shaktikanta Das had earlier this month said that manufacturing and services PMIs along with rising WPI inflation show a persistence of input price pressure.

Also, the build-up in input price pressures across sectors, driven in part by elevated global commodity prices, remains a concern.

“The inflation trajectory over the rest of the year will be shaped by the COVID-19 infections and the impact of localised containment measures on supply chains and logistics,” Das had said.