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WPI inflation rises to 4-month high of 14.55% in March as crude oil prices soar

High crude oil prices were the biggest contributor to the rise in India's WPI inflation in March. (Photo: Reuters)Premium
High crude oil prices were the biggest contributor to the rise in India's WPI inflation in March. (Photo: Reuters)

  • Core inflation rose 2.2% sequentially in March, a fallout of the geopolitical tensions, with the inflation rate rising to 10.9%, Morgan Stanley Research said, adding that only four of the 21 sub-groups of the core index escaped a month-on-month rise in March

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NEW DELHI: India’s wholesale inflation rose to a four-month high in March, largely driven by a surge in global crude oil and other commodity prices amid the Russia-Ukraine war. Wholesale Price Index (WPI)-based inflation which has remained in double-digits for a year now, is expected to climb higher, economists cautioned.

WPI inflation jumped to 14.55% in March from 13.11% in February, as per data released by the commerce ministry on Monday. Crude oil prices were the biggest contributor to the rise in WPI inflation in March.

“We expect the WPI inflation to remain in the range of 13.5-15% in the current month, partly depending on where crude oil prices settle in the rest of April 2022 and how much petrol and diesel prices are revised further," Aditi Nayar, chief economist, Icra Ltd., said.

Food index rose 8.71% in March against 8.47% in February even as the vegetable price index eased from 212.6 in February 2022 to 179.7 last month. Non-food price index surged to its highest in six months to 175.2 compared with 170.2 in February.

Core inflation rose 2.2% sequentially in March, a fallout of the geopolitical tensions, with the inflation rate rising to 10.9%, Morgan Stanley Research said, adding that only four of the 21 sub-groups of the core index escaped a month-on-month rise in March, namely beverages, other transport equipment, wearing apparel and pharmaceutical products.

“Supply-chain disruptions due to covid and geopolitical conflict is expected to keep the input prices high in the months ahead posing a significant challenge for the policymakers," Upasna Bhardwaj, an economist at Kotak Mahindra Bank said.

India's retail inflation accelerated to 6.95% in March from 6.07% in February. Food inflation jumped to 7.68% last month compared with 5.85% in February.

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