Wholesale Inflation Hits Three-Month High Of 0.53% In March

Wholesale inflation in the country rose marginally to a three-month high of 0.53 percent in March compared to 0.20 percent in the preceding month due to an increase in prices of vegetables, potatoes, onions,s and crude oil. The Wholesale Price Index (WPI)-based inflation was in the negative zone from April to October and had turned positive in November at 0.26 percent. The inflation in March 2023 was 1.41 percent.

"The annual rate of inflation based on all-India Wholesale Price Index (WPI) number is 0.53 percent (provisional) for March 2024 (over March 2023)," the commerce and industry ministry said in a statement on Monday. Food inflation moved up marginally to 6.88 percent in March from 5.42 percent in the same month a year ago, data showed. Inflation in vegetables was 19.52 percent, up from (- 2.39) percent in the same month a year ago.

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WPI for potatoes witnessed a jump of 52.96 percent against a deflation of 25.59 percent, while for onions 56.99 percent as compared to (-) 36.83 percent in March 2023. The Food inflation also shot up to a three-month high of 4.6 percent in March 2024.

"The increase in the food inflation largely emanated from the cereal's inflation which stood at a 12-month high of 9 percent. The other items such as pulses and vegetables which are important for ordinary consumers'/households' basket witnessed elevated inflation of 17.2 percent and 19.5 percent, respectively in March 2024," India Ratings and Research Senior Director Sunil Kumar Sinha said.
However, core inflation continues to be in a deflationary mode with March print at (-) 1.1 percent.

The data showed that inflation in the crude petroleum segment rose by 10.26 percent in March this year against a deflation of 23.53 percent in March 2023 due to the hardening of crude prices globally. The positive rate of inflation in March 2024 is primarily due to an increase in prices of food articles, electricity, machinery & equipment, and other manufacturing, etc. The prices of manufactured products also declined by 0.85 percent. Meanwhile, retail inflation declined to a five-month low of 4.85 percent in March mainly due to cooling food prices.

The Consumer Price Index (CPI)-based retail inflation was 5.09 percent in February and 5.66 percent in March 2023. Previously, CPI-based inflation was the lowest at 4.87 percent in October 2023. The inflation in the food basket was at 8.52 percent in March, down from 8.66 percent in February, according to the data released by the National Statistical Office (NSO) last week. According to Rajani Sinha, Chief Economist- CareEdge Ratings, with the fading of a supportive base, it is anticipated that the WPI inflation will rise in the upcoming months.

The recent increase in global commodity prices, particularly driven by higher Brent crude prices and a rise in industrial metal prices, is expected to add to upward pressures on WPI, Sinha said.

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