India’s Wholesale Price Index (WPI) inflation witnessed a slight uptick, reaching 1.26 percent in April compared to the same period last year, according to data released by the Commerce and Industry Ministry on Tuesday.
Key Highlights
- Price Trends: In April 2024, prices of crude petroleum and natural gas surged by 3.56 percent, while food articles saw a rise of 2.67 percent compared to March 2024. Conversely, prices of non-food articles (-1.19 percent) and minerals (-1.55 percent) experienced declines during the same period.
- WPI Food Index: The WPI Food Index, constituting 24.38 percent of the index, displayed an upward trajectory, with the inflation rate escalating from 4.65 percent in March to 5.52 percent in April.
- Fuel and Power: Fuel and Power, accounting for 13.15 percent of the index, observed a marginal decline. While prices of mineral oils increased by 0.06 percent, electricity prices witnessed a dip of 1.20 percent in April 2024 compared to March 2024.
- Inflation in Manufactured Products: With a substantial weightage of 64.23 percent in the index, inflation in manufactured products rose by 0.50 percent to 140.8 in April from 140.1 in March.
- Consumer Price Inflation: Data released earlier showed that India’s consumer price inflation eased to an 11-month low of 4.83 percent in April, providing relief to household budgets.
Expert Insights
Commenting on the inflation trends, an official statement noted, “Among the top five groups, the year-on-year inflation on groups ‘Clothing & Footwear,’ ‘Housing,’ and ‘Fuel & light’ has decreased since last month.”
Policy Implications
The easing of retail inflation brings it closer to the Reserve Bank of India’s (RBI) mid-term target of 4 percent. This development signals a potential for the central bank to consider cutting key interest rates, aiming to stimulate demand and accelerate economic growth by making loans available at lower interest rates to corporates and consumers.
India’s Wholesale Price Index (WPI) inflation in April reflects a nuanced picture of price movements across various sectors. While certain segments witnessed upward trends, others experienced declines. The easing of consumer price inflation further underscores the positive trajectory, offering relief to households and potentially paving the way for monetary policy adjustments aimed at fostering economic recovery.
