WPI inflation print moved up sharply to 14.55% in Mar-22 from 13.11% in Feb-22 - Acuité Ratings

Mr. Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research.

"In line with the surge in the CPI print, the WPI inflation print has also moved up, rather sharply, to 14.55% in Mar-22 from 13.11% in Feb-22 with a significantly higher sequential expansion of 2.7% as compared to 1.4% seen in the previous month. Clearly, the data reinforces the presence of stronger inflationary pressures in the manufacturing and the services sector.

With the sharp rise in crude oil prices and the breach of USD 100 pb consequent to the intensification of the Russia-Ukraine conflict from end Feb-22, there has been an acceleration in commodity prices and this is visible in both the sequential rise in primary commodities and fuel and power index of 2.1% and 5.7% respectively. The inflation in manufactured products have risen sequentially to almost 2.3% and also increased on a YoY basis to 10.7% from 9.8% in Feb-22, reflecting the increasing pressures of pass through from input cost surge. The inflation levels would have been slightly higher had there not been a sequential moderation in the wholesale food category which, however may start getting reversed over the next few months.

Further, WPI core inflation (non-food manufacturing inflation) is estimated to have increased slightly to 10.9% YoY in Mar-22 from 10.0% YoY in Feb-22, with a sequential uptick of 2.18% vs 0.79% in the previous month. Amidst increasing pressures on the profit margins of manufacturing companies and a pickup in consumption demand, Acuité expects a further pass through of input costs. We expect persistent supply side bottlenecks and high commodity prices to hold the core inflation at double digit levels in the near term."

Source : Equity Bulls

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AcuiteRatings WPI Inflation March2022 CPI