Wholesale inflation in April quickens to 13-month high of 1.26% on spikes in power, food prices

India's wholesale price index-based inflation accelerated to 1.26 per cent in April on an annual basis as against 0.53 per cent in March, at a 13-month high, data from the Commerce Ministry on Tuesday showed.

A Reuters poll showed that WPI inflation for April was expected at 1 per cent.

Wholesale onion prices quickened by 59.75 per cent in April after rising 56.99 per cent in March.


According to industry representatives, India is expected to face a major shortage in onion supply until it harvests the next kharif crop marking a reversal from the current scenario with the country facing a glut in supplies of the bulb vegetable and stable prices amid an export ban.

Moreover, WPI for potatoes accelerated by 71.97 per cent in April after rising 52.96 per cent in March.

Wholesale prices of onions had contracted by 5.54 per cent and potatoes surged by 30.56 per cent in the same month a year ago, data shows.

The month-over-month change in WPI index for the month of April, 2024 stood at 1.26 per cent as compared to 0.53 per cent in March, 2024.

Wholesale food inflation quickened to 5.52 per cent on an annual basis after rising 4.7 per cent in March. On a MoM basis, food inflation grew 1.94 per cent after growing 0.95 per cent in March.

Positive rate of inflation in April, 2024 is primarily increase in prices of food articles, electricity, crude petroleum & natural gas, manufacture of food products, other manufacturing etc, the government said.

Wholesale inflation in crude petroleum and natural gas grew 4.97 per cent in April as against 1.64 per cent in the same month last year

For the primary articles segment, the inflation rate in April surged to 5.01 per cent from 4.51 per cent in the preceding month.

Manufactured product prices further fell 0.42 per cent against a 0.85 per cent drop in the previous month. Fuel and power prices rose 1.38 per cent compared with a 0.77 per cent drop in March.

The government also released India's retail inflation data which showed that it eased to a 11-month low in April at 4.83 per cent on an annual basis as against 4.85 per cent in the previous month.


'Base effect will remain adverse, expect higher inflation'
After a sharp rise in the WPI inflatio, as part of the future outlook, economists suggest that the base effect will remain adverse over the next two months, thereby resulting in higher WPI inflation.

"Going ahead, the base effect will remain adverse over the next two months, thereby resulting in higher WPI inflation. External risks emerging from ongoing geopolitical tensions also need to be monitored, given the risk they can pose to supply chains. Having said that, the outlook for food inflation has brightened due to anticipations of a normal monsoon, which is expected to bolster agricultural production. However, monitoring the monsoon's temporal and spatial distribution is critical. We expect WPI inflation to average around 3% in FY25," said Rajani Sinha, Chief Economist at CareEDGE.