WPI inflation rises to 3.18 pc in April on costlier fuel, fruits

WPI inflation rises to 3.18 pc in April on costlier fuel, fruits

However, food prices made a turnaround in April, rising by 0.87 per cent, after a deflation of 0.29 per cent in March.

The rise in consumer inflation is incongruous to the easing of inflation for three months in a row until March when it had eased to 4.28 per cent, driven by lower food prices.

Retail inflation, measured by Consumer Price Index (CPI) had fallen to 2.99 percent in April 2017.

On a sub-category basis, vegetables in April became costly by 7.29 per cent, while prices of milk-based products rose by 3.21 per cent.

In the fuel and power category, the price of high speed diesel grew the most, by 13.01%. However, the LPG prices continued to drop at a faster rate of 11 per cent. Inflation in manufactured products remained at 3.11 per cent. Monday's data is the final price print issued before the Reserve Bank of India's policy review slated on June 6.

An unfavourable base effect also pushed WPI inflation higher in April.

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The WPI inflation for February was revised upwards to 2.74 per cent from the provisional estimate of 2.48 per cent.

"The annual rate of inflation, based on monthly WPI, stood at 3.18 per cent (provisional) for the month of April 2018 (over April 2017) as compared to 2.47 per cent (provisional) for the previous month and 3.85 per cent during the corresponding month of the previous year", the ministry said in the review for April 2018.

Similarly, the inflation in the fruit basket was higher at 9.65 per cent compared to 5.78 per cent in the previous month.

That was above the 2.9 percent increase economists had forecast. The biggest risk that Asia's third-largest economy faces is rising crude oil prices, which hit $78 a barrel last week, their highest since November 2014 following prospects of new USA sanctions on Iran.

On WPI, Aditi Nayar, Principal Economist with ICRA said that inflation is expected to continue to rise over the remainder of this quarter.

Yes Bank's Chief Economist Shubhada Rao also higher inflation in with global crude prices firming up as well as MSP-led higher food inflation.

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