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

A vendor loads tomatoes in a bag for a customer at a wholesale vegetable market in Mumbai, March 14, 2018.

Among non-food categories, the "fuel and light" segment's inflation rate accelerated to 5.24 per cent in April.

Consumer price-based inflation (retail), which is tracked closely by the RBI, was higher than the RBI's medium-term target of 4 per cent in April - for the sixth straight month. March's data is an indication that prices at a relatively safe distance from the apex bank's upper tolerance level of inflation at 6 percent. This may result in RBI maintaining status quo on policy rates in its June 2018 monetary policy review.

However, last month's rise in WPI (Wholesale Price Index) inflation rate was slower on a year-on-year (YoY) basis.

As the payment for oil increases, India's current account deficits are prone to widen making the economy more vulnerable to rising USA interest rates.

Cauvery row: Centre suggests 9-member panel to regulate water distribution
The Supreme Court on May 8 had slammed the Centre for showing "sheer contempt of Court" by not framing a Cauvery Scheme. The Centre has suggested two heads for the CMB one from Karnataka and one from Tamil Nadu.

However, inflation in vegetables segment was lower at 7.29 per cent in April compared to 11.7 per cent. The index for fuel and power (weight 13.15 per cent) also rose by 0.9 per cent to 98.9 from 98.0 for the previous month due to due to higher price of naphtha, petroleum coke, furnace oil, HSD, kerosene and petrol. Housing inflation increased to 8.50 per cent in April from 8.31 per cent in March and inflation rate for "clothing and footwear" increased to 5.11 per cent in April from 4.91 per cent. While pulses have been witnessing deflation for months now, the rate of deflation, rose in April to 22.46 per cent, up from 20.58 per cent in March.

Other notable sub-categories such as cereals became dearer by 2.56 per cent and meat and fish recorded a rise of 3.59 per cent.

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

"The global rise in crude oil prices remains a key risk for the inflation trajectory".

"The housing and rising oil prices are likely to keep pressure on headline inflation in coming months".

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