What does the sharp spike in WPI inflation indicate?
Answer
Answer
Wholesale price index or WPI inflation for the month of Mar-22 went up sharply to 14.55% as compared to 13.11% in Feb-22. The sharp spike in WPI inflation was led by edible oil prices and power prices. Crude oil trading at above $110/bbl in the Brent market was a key reason for this spike in inflation with a 55.17% yoy spike in Mar-22.
It was actually a lot more than crude. In Mar-22 there was a sharp increase in the prices of natural gas, mineral oils, basic metals and other similar items due to the ongoing Russia-Ukraine conflict. High frequency pressure was visible in month-on-month inflation at a high of 5.68% for Mar-22. In short, March saw lot of pressure over February in prices.