Perspective on WPI Data by Rajani Sinha, Chief Economist, CareEdge Ratings, CareEdge Ratings
Below the Perspective on WPI Data by Rajani Sinha, Chief Economist, CareEdge Ratings, CareEdge Ratings
‘In line with the expectations, WPI inflation rose from 1.3% in April to 2.6% in May, a 15-month high. Inflation in primary articles rose by 7.2%, led by higher food inflation. Inflation in manufactured products entered positive territory after 14 months. While Brent crude prices have moderated in the past in the past two months, the recent uptick in global commodity prices, especially industrial metal prices, warrants close monitoring as it can result in higher input costs. Since the end of March, industrial metal prices have risen by 9.3%. Globally, food prices are also increasing, with the FAO Food Price Index rising for three consecutive months after moderating throughout CY 2023.
Having said that, the outlook for food inflation has brightened due to anticipations of a normal monsoon, which is expected to bolster agricultural production. However, monitoring the monsoon's temporal and spatial distribution is critical. We expect WPI inflation to average around 3% in FY25.’
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