India’s April WPI inflation accelerates to 17-year high

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A vendor climbs to his stall as another waits for customers at a wholesale vegetable market in Mumbai

By Manoj Kumar and Aftab Ahmed

NEW DELHI (Reuters) – India’s wholesale prices accelerated at the fastest pace since at least April 2005, according to Refinitiv data, as the Ukraine war and a weak rupee pushed up energy and raw material costs for companies.

Annual wholesale price inflation, a proxy for producers’ prices, climbed to 15.08% in April, remaining in double-digits for the 13th month in a row, and higher than 14.48% forecast in a Reuters poll of analysts.

Russia’s invasion of Ukraine in February has supercharged already rising commodity and fuel prices and kept global policymakers busy trying to contain red-hot inflationary pressures.

Fuel prices, a big component of the increase, jumped 38.66% on the year versus 34.52% in March.

A more than 4% rupee depreciation against the dollar this year has also made imported items costlier.

Wholesale manufactured product prices rose 10.85%, against 10.71% in the prior month, while food prices accelerated at an 8.88% pace, versus 8.71% the previous month, data showed.

Economists said that with WPI inflation picking up along with retail inflation at an eight-year high of 7.79% in April, the central bank was likely to push for aggressive rate hikes to tame prices.

“With WPI inflation remaining solidly in double-digits, the probability of a repo hike in the June 2022 review of monetary policy has risen further,” said Aditi Nayar, chief economist at ICRA, the Indian arm of ratings agency Moody’s.


She expects a 40-basis-point hike in the repo rate in June followed by a 35-basis-point hike in August.

India announced a ban on wheat exports on Saturday as a scorching heat wave curtailed output and domestic prices hit a record high.

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(Reporting by Manoj Kumar and Aftab Ahmed; Editing by Jacqueline Wong)

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