Wholesale inflation, which has remained in double digits for a year now, quickened to a four-month high in March amid a relentless rise in commodity prices following the Russian invasion of Ukraine.
The Wholesale Price Index (WPI) rose 14.55% in March from 13.11% in February, according to data released by the commerce ministry on Monday.
Meanwhile, food inflation accelerated to 8.7% in March from 8.5% in February, led by a jump in foodgrain, fruits, and milk prices.
Wholesale prices are expected to increase further, economists have cautioned.
“We expect the Wholesale Price Index 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 and how much petrol and diesel prices are revised further,” said Aditi Nayar, chief economist, ICRA.
Economists have cautioned that the headwinds arising out of the disruption in the international supply and logistics chain, coupled with uncertainty, would continue to put pressure on domestic wholesale inflation.
“We remain concerned that even a normal monsoon may not be enough to douse retail prices of items that are pushing up food inflation, such as edible oils,” said Sunil Kumar Sinha, principal economist, India Ratings & Research.
Core inflation in March rose to 10.9% from 10% in February. The inflation index in the non-food article category surged to its highest in six months to 175.2 compared with 170.2 in February.
Morgan Stanley said that only four of the 21 sub-groups of the core index escaped a month-on-month rise in March. They are beverages, other transport equipment, wearing apparel and pharmaceutical products.
Manufactured products inflation also hardened to 10.7% in March 2022 from 9.8% in February.
“Inflation for fuel and manufactured products have remained elevated all through the year partly due to the base effect as well as producers regaining their pricing power post the lockdown where they were perforce compelled to hold on to their prices,” said Madan Sabnavis, chief economist, Bank of Baroda.
Out of the 22 commodity indices, nine rose at a faster pace in March this year than in the previous month, led by basic metals, other manufacturing, electronic products, printing and recorded media, tobacco and food, data showed.
In contrast, prices of furniture, non-metallic mineral products and textiles eased in March.
