India's April Wholesale Inflation Hits 13-Month Peak at 1.26%

India experienced a significant rise in wholesale price index (WPI)-based inflation in April, hitting a 13-month high of 1.26%. This uptick was primarily attributed to increased costs of food articles, electricity, and crude petroleum and natural gas. In particular, food prices witnessed a notable year-on-year jump of 5.52% in April, up from 4.65% in March, with primary articles registering a 5.01% rise.

The WPI measures changes in the price of goods sold and traded in bulk by businesses. The index saw a sixth consecutive month of positive growth. The food index, with a weightage of 24.38%, climbed from 180.1 in March to 183.6 in April. This growth in wholesale prices is contrasted by a slight easing of retail inflation, which the Reserve Bank of India (RBI) closely monitors for monetary policy considerations. Retail inflation softened to an 11-month low of 4.83% in April on an annual basis.

In response to ongoing inflationary pressures, the RBI has increased the repo rate by a total of 250 basis points to 6.5% since May 2022. The central bank's action is aimed at curbing inflation, which had previously seen WPI-based inflation in double digits for 18 consecutive months until September 2022. Despite the rise in wholesale prices, the latest data on retail inflation indicates a downward trend, which may influence future monetary policy decisions.