India wholesale prices rise after 17 months in April
Photo Credit: Shah Junaid/VCCircle

Wholesale prices in India rose in April after falling for 17 months as vegetables and pulses turned costlier, adding to worries that may prompt the central bank to keep interest rates on hold at its policy review next month.

The wholesale price index-based inflation rose an annual 0.34% last month, government data showed on Monday. That compares with March’s 0.85?cline and a fall of 2.43% in April 2015.

Food inflation accelerated to 4.23% last month from 3.73% in March, with pulses prices climbing 36.36% and potato prices surging 35.45%. Vegetable prices rose 2.21% compared with a drop of 2.26% in March. Onion prices, however, fell an annual 18% in April.

The pace of decline in fuel prices slowed to 4.83% in April from March’s 8.3% drop. Prices of manufactured goods rose, after several months of decline, by 0.71%.

The data come after the government said last week that retail inflation in April accelerated to 5.39% from March’s 4.83% while industrial output growth plunged to 0.1%.

The data sets point to difficulties authorities face in accelerating economic growth while keeping inflation under control. The Reserve Bank of India last cut interest rates, by 25 basis points, at its April monetary policy review.

The central bank has lowered interest rates by 150 basis points overall since January 2015, and RBI governor Raghuram Rajan has said that he may cut rates again if inflation eases and monsoon rainfall is good this year after two years of drought. The RBI’s next policy review is on June 7.

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