New Delhi, May 15, 2024: The Ministry of Commerce and Industry today released the latest data on the Wholesale Price Index (WPI) for India, revealing a notable increase in the annual rate of inflation to 1.26% for April 2024. This marks a significant rise compared to the previous month and the same period last year, highlighting the evolving economic landscape.
Key Drivers of Inflation
The uptick in inflation is primarily attributed to escalating prices in several key sectors. The data indicates that the increase in prices of food articles, electricity, crude petroleum & natural gas, and various manufactured products were the main contributors to the higher inflation rate.
Detailed Analysis of WPI Components
1. Primary Articles:
- The Primary Articles group, which has a weight of 22.62% in the WPI, saw its index rise to 186.7 in April 2024 from 183.1 in March 2024, reflecting an annual inflation rate of 5.01%.
- Notably, food articles within this category experienced a substantial price increase, with vegetables showing a dramatic 23.60% year-over-year inflation rate. Potatoes, in particular, saw prices surge by 71.97%, while onions increased by 59.75%.
2. Fuel & Power:
- The Fuel & Power category, weighted at 13.15%, registered a slight decrease in its index to 154.8 from 155.2 in the previous month, resulting in a monthly decline of 0.26%. However, on an annual basis, this category saw a 1.38% inflation rate.
- Within this group, prices of mineral oils edged up by 0.06%, whereas electricity prices fell by 1.20%.
3. Manufactured Products:
- Representing the largest segment of the WPI with a 64.23% weight, Manufactured Products experienced a modest increase in their index from 140.1 in March to 140.8 in April, yielding an annual deflation rate of -0.42%.
- Despite the overall deflation in manufactured products, certain sub-groups like basic metals, textiles, and chemical products saw price increases.
4. Food Index:
- The Food Index, which comprises both food articles from the Primary Articles group and food products from the Manufactured Products group, rose to 183.6 in April from 180.1 in March. This resulted in a significant annual inflation rate of 5.52%.
Month-over-Month Changes
The WPI for all commodities increased by 0.79% in April 2024 compared to March 2024. This month-over-month rise reflects broader trends in various categories:
- Primary Articles saw a 1.97% increase.
- Fuel & Power decreased by 0.26%.
- Manufactured Products rose by 0.50%.
Commentary from Economic Analysts
Economic analysts attribute the rise in wholesale prices to multiple factors, including supply chain disruptions, fluctuating global oil prices, and increased demand in certain sectors. The notable rise in vegetable prices, especially potatoes and onions, has been linked to seasonal variations and crop yield issues.
Government Response
The government is closely monitoring the inflationary trends and is expected to implement measures to stabilize prices. The Ministry of Commerce and Industry has assured that steps will be taken to address supply chain inefficiencies and to support farmers to mitigate the impact of rising food prices.
Future Outlook
Looking ahead, the WPI for May 2024 will be closely watched, with the next release scheduled for June 14, 2024. Economists predict that while some volatility may persist, efforts to improve supply chain logistics and favorable monsoon forecasts could help stabilize prices in the coming months.
Source: Ministry of Commerce and Industry, Government of India & PIB
For more detailed statistics and monthly reports, visit the official website at eaindustry.nic.in.
