India's wholesale price inflation surged to a one-year high of 1.26 per cent in April, exceeding economist expectations and raising concerns about price pressures, Reuters reported on Tuesday. This rise was primarily driven by increasing costs of food and primary articles, according to latest data released by the government on Tuesday. The latest figures mark a significant jump from the 0.53 per cent inflation rate recorded in March and represent the highest level since March 2023 (1.41 per cent). Food prices witnessed a steeper rise of 5.52 per cent compared to 4.65 per cent in March, while primary articles also saw a steeper increase of 5.01 per cent year-on-year. Despite a slight decline in fuel and power prices, the overall inflation spike was attributed to rising global crude oil and food prices, according to Paras Jasrai, an economist at India Ratings. He further predicts a potential acceleration of inflation in May due to a favourable base effect and a global uptick in commodity prices. This development comes in contrast to the slight easing of India's annual retail inflation rate reported earlier this week. While food prices remain elevated, lower fuel costs contributed to the moderation in retail inflation. The Reserve Bank of India (RBI) maintained interest rates in April, prioritising robust economic growth despite inflation exceeding its 4 per cent target. In light of the rising wholesale inflation, markets expected a rate cut only in early 2025, as opposed to earlier views for an easing in the last quarter of 2024.
