Informist, Wednesday, May 12, 2021
NEW DELHI – India's WPI inflation likely surged to 9.1% in April, the highest in nearly a decade, on the back of a low base and continued rise in prices of manufactured products, according to the median of estimates of 18 economists polled by Informist.
Wholesale inflation data for April is scheduled to be released by the commerce and industry ministry at 1200 IST on Monday. It was at 7.39% in March and (-)1.57% in April 2020.
At 9.1%, the projected WPI inflation print will be the highest under the current series, data for which is available from April 2013. Using the linking given by the commerce ministry to compare inflation across different series, the expected April inflation number is the highest since 9.46% in November 2011.
WPI inflation had plunged into negative territory in April last year when demand crashed due to the nationwide lockdown imposed to curb the spread of the coronavirus. Given that the all-commodity index fell 1.0% month-on-month in April 2020, WPI inflation this month will rise to 8.5% even if the index remains unchanged from March's 129.3.
However, economists expect the all-commodity index to rise at least 0.5% sequentially in April.
"In line with past few months' trend, metal prices are expected to drive the increase in wholesale inflation," said Anagha Deodhar, chief economist at ICICI Securities.
Deodhar sees basic metals inflation rising to 21.3% and manufacturing inflation to 8.2%.
Inflation for manufactured products, which account for nearly two-thirds of the weight of the WPI, was at 7.34% in March, the highest under the current WPI series.
Other indicators also suggest rising price pressures for manufactured products. IHS Markit's Purchasing Managers' Index survey showed that, in April, input prices for the manufacturing sector rose at the fastest pace since mid-2014.
Some food items also witnessed a sequential rise in prices. Of the 22 food items for which the Department of Consumer Affairs details data, 15 recorded a month-on-month rise in April. Prices of pulses rose 0.4-3.8% month-on-month, while those of edible oils were up 2.5-6.6%.
Among vegetables, potato prices recorded a month-on-month increase of 1.6%. However, onion prices fell by a third, while those of tomatoes were down by a marginal 0.8%.
Petrol and diesel prices cooled by 0.6-0.7% month-on-month in April.
Despite the sequential easing, fuel and power inflation is expected to rise sharply due to the low base effect. This was seen in March as well, when fuel and power inflation jumped to 10.25% as the base index had fallen 4.0% month-on-month.
The following is a summary of the poll by Informist on WPI inflation in April and the details of estimates by respondents, in ascending order:
Range of expectations: 8-11%
Mean: 9.1%
Median: 9.1%
Mode: 8.9%
| ORGANISATION | WPI INFLATION ESTIMATE |
| Axis Capital | 8% |
| CARE Ratings | 8.3% |
| State Bank of India | 8.47% |
| STCI Primary Dealership | 8.50% |
| L&T Financial Services | 8.89% |
| Standard Chartered Bank | 8.89% |
| Barclays | 8.9% |
| Nomura | 8.9% |
| IDFC FIRST Bank | 9.0% |
| Deutsche Bank | 9.1% |
| Brown Brothers Harriman | 9.16% |
| IndusInd Bank | 9.16% |
| Kotak Mahindra Bank | 9.28% |
| Bank of Baroda | 9.5% |
| ICICI Securities Primary Dealership | 9.6% |
| YES Bank | 9.8% |
| Capital Economics | 10.0% |
| ICICI Securities Ltd | 11% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Pragya Srivastava and Aaryan Khanna
Edited by Patricia Hou
Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2021. All rights reserved.
