## Wholesale Price Inflation Rises in March
The wholesale price index (WPI)-based inflation rose to a three-month high of 0.53% in March, up from 0.2% in February. This marks the fifth consecutive month of positive inflation after a period of deflation for most of the 2023-24 financial year.
The increase in factory gate inflation was driven by higher prices for food articles, electricity, crude petroleum, and natural gas. However, the overall WPI inflation for the year remained negative at -0.7%, compared to 9.6% in the previous year.
Food inflation stood at 3.2% for the year, down from 6.4% in the previous year. Fuel and manufactured product prices contracted during the year, compared to significant increases in the previous year.
On a monthly basis, prices of pulses, vegetables, and milk decelerated. Fruits and protein-rich items like eggs, meat, and fish also saw price contractions.
Manufactured products, which have a significant weighting in the index, remained in deflation for the 13th consecutive month in March. This was due to continued price declines in textiles, paper, chemicals, metals, and finished steel.
Fuel prices also continued to contract for the 11th consecutive month, led by declines in high-speed diesel, cooking gas, and petrol.
Economists expect WPI inflation to edge up in the coming months due to rising global commodity prices and geopolitical tensions. However, a normal monsoon and recovery in rabi sowing could provide some cushion to food inflation.
While the Reserve Bank of India tracks retail inflation for its monetary policy, the anticipated rise in WPI may contribute to sticky retail inflation.