India April wholesale price index rises at fastest pace in a year

FILE PHOTO: Customers buy fruits and vegetables at an open air evening market in Ahmedabad, India

NEW DELHI (Reuters) - India's wholesale price-based inflation rose 1.26% in April, the highest pace in a year, mainly driven by food and primary articles, government data showed on Tuesday.

The April figures were higher than the 1% rise expected by economists polled by Reuters and up from a 0.53% year-on-year rise in March.

Wholesale inflation was the highest since March 2023, when it hit 1.41%.

Food prices rose 5.52% on-year compared with an increase of 4.65% in March, while prices of primary articles were up 5.01% against a 4.51% rise in the previous month.

Manufactured product prices fell 0.42% against a 0.85% drop in the previous month. Fuel and power prices rose 1.38% compared with a 0.77% drop in March.

The inflation was driven by higher crude oil and food prices, said Paras Jasrai, an economist at India Ratings.

Inflation should quicken further in May, largely due to a favourable base and some pickup in global commodity prices, said Jasrai.

Annual retail inflation rate eased slightly in April, partly due to lower fuel prices, although food prices remained elevated, government data showed on Monday.

The central bank held interest rates steady in April as growth was seen staying robust while inflation has remained above its 4% target. Markets now expect a rate cut only in early 2025 as opposed to earlier views for an easing in the last quarter of 2024.

(Reporting by Nikunj Ohri and Sarita Chaganti Singh; Editing by Kim Coghill and Tom Hogue)