New Delhi: Inflation based on wholesale price index (WPI) fell in April to 5.2 per cent due to decrease in food, fuel and power prices. The inflation based on WPI was at 5.7 per cent in March.
The WPI inflation has eased at a time when retail inflation based on CPI had risen to a three month high in April to 8.59 per cent. “The divergence was partly driven by food inflation, which rose for CPI and slowed for WPI. However, core inflation held broadly steady in both cases,” said HSBC in a research note.
It said in the coming months inflation is likely to remain sticky as food-related disinflation has come to an end. Moreover, the El Nino and administered fuel price hikes post-elections pose upside risks. “The RBI will, therefore, not have much to cheer about and have to maintain a hawkish stance,” added HSBC.
Food inflation eased to 8.64 per cent in April from around 10 per cent in March. This was mainly led by fall in vegetable prices which came down to 1.34 per cent in April from 8.57 in March. Egg, Meat and Fish prices also went down to 9.97 per cent in April.
“We are encouraged that the inflation numbers are coming down... On the whole it appears that we are on track as far as inflation is concerned... (it is) something to smile about,” said finance secretary Arvind Mayaram.
The fuel and power inflation in April fell to 8.93 per cent from 11.22 per cent in March. “The temporary pause in diesel price hikes coupled with a cut in prices of market determined fuel items, saw fuel inflation slowing. While this could partially reverse next month as oil firms raised diesel prices by Re 1 per litre in May, it could be partially offset by the appreciation in the Indian Rupee,” said Citi Research.
