displayed a divergent trend at the wholesale and retail levels in April. The decline in WPI food inflation is encouraging and suggests that the spike in retail food inflation was largely driven by disruption related to the lockdown.
Vegetables were a major driver of the downtrend in the wholesale food inflation in April, suggesting that their perishable nature — amid uncertain demand during the lockdown — contained the normal seasonal uptick seen with the rise in temperatures,” said Aditi Nayar, principal economist, ICRA.
Elsewhere, major deflationary pressure rose in the fuel and power segment, which saw prices fall by more than 10 per cent, following marginal fall of 1.7 per cent in March.
The government didn’t release the inflation figures for manufactured products, which have a combined weighting of 65 per cent in the index.
In the previous month, prices in the sector had risen by just 0.3 per cent, after rising by 0.4 per cent in February. However, in the latest month, the sectors are expected to have seen mixed performance.
“Of the six sub-components of the manufacturing
index for which the data is available, three components have seen an increase in inflation on a year-on-year basis, while the other three have seen a fall. Basic metals, having the highest weighting (9.65 per cent) in the manufacturing
index, contracted 4.3 per cent in April. Even chemicals, having a weighting of 6 per cent, have contracted by 2.6 per cent during the month,” CARE Ratings said after analysing the data.
Eleven of the 17 components within manufactured products recorded contraction in March.
Experts predict wholesale inflation will continue to remain low on account of low commodity prices globally. Among these, international crude oil prices
and metal prices on account of weak global demand conditions were highlighted by CARE Ratings.