Food, fuel prices lift April wholesale, retail inflation rates (Roundup)

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New Delhi, May 14 (IANS) A rise in food, fuel, housing and services cost pushed India’s annual wholesale and retail inflation rates higher in April.

Accordingly, India’s wholesale inflation rate rose to 3.18 per cent in April from an increase of 2.47 per cent in the previous month, the data furnished by the Ministry of Commerce and Industry showed on Monday afternoon.

However, last month’s rise in WPI (Wholesale Price Index) inflation rate was slower on a year-on-year (YoY) basis. The rate had increased to 3.85 per cent in April 2017.

“Build up inflation rate in the financial year so far was 0.69 per cent compared to a build up rate of (nil) 0.00 per cent in the corresponding period of the previous year,” the ministry said in the review for April 2018.

On a sequential basis, the expenses during the month under consideration on primary articles, which constitute 22.62 per cent of the WPI’s total weightage, rose by 1.41 per cent, from a marginal rise of 0.24 per cent in March 2018.

Among primary articles, food, which has a weightage of 15.26 per cent in the index, edged up last month by 0.87 per cent from a deceleration of (-) 0.29 per cent reported for March.

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The cost of fuel and power, which commands a 13.15 per cent weightage in the index, increased at a fast pace of 7.85 per cent during the month, from a growth of 4.70 per cent in March.

The data showed that expenses on manufactured products in the month under review registered a rise. It increased by 3.11 per cent, from 3.03 per cent in March.

Reacting to the WPI data, industry body Assocham pointed out that petrol and diesel inflation stood out as the “main worry area”.

“Break down of the WPI data for April,2018 shows annualised inflation of close to 10 per cent for petrol and over 13 per cent for high speed diesel. Even more worrying is the fact that these levels are on a very high base in the same month last fiscal,” the industry body said in a statement.

“Going forward, increasing crude oil prices and their cascading impact would be one of the key worry areas for the Indian economy,” the industry chamber’s Secretary General D. S. Rawat was quoted in the statement as saying.

A similar trend was seen in the Consumer Price Index (CPI) inflation rate which was released later on Monday evening.

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According to the data furnished by the Ministry of Statistics and Programme Implementation, the country’s retail inflation rose to 4.58 per cent in April from a rise of 4.28 per cent in March and 2.99 per cent in the corresponding period of the previous year.

The Consumer Food Price Index (CFPI) during the month under review stood at 2.80 per cent from a rise of 2.81 per cent reported for March 2018. On a YoY basis, last month’s increase in the CFPI rate was much higher than the 0.61 per cent rise during April 2017.

The annual CPI in rural areas in April ruled higher at 4.67 per cent, while in urban India it rose by 4.42 per cent.

As per the data, the retail inflation rate on a YoY basis rose due to higher prices of food items like vegetables, milk-based products, eggs, meat and fish.

On a sub-category basis, vegetables in April became costly by 7.29 per cent, while prices of milk-based products rose by 3.21 per cent.

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.

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The category of food and beverages during the month under consideration recorded a rise of 3 per cent over the same period last year.

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

Reacting to the CPI data, Richa Gupta, Senior Director and Senior Economist, Deloitte India said: “The hike was largely driven by an upswing in core inflation, especially with a broad based increase in services segment while marginal upside movements were seen in clothing and housing segments as well.”

“Food prices remained largely flat with some increase in fruit prices and if monsoon plays out as expected, then the upside risks are likely to remain limited. In contrast, core inflation can be expected to remain under pressure due to expectations of higher crude oil prices.”

In addition, India Ratings and Research’s Chief Economist Devendra Kumar Pant said: “Higher core-core inflation (non-food, non-fuel and light and non-transport and communication) shot to 34 months high at 6 per cent.”

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

–IANS

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