High inflation adds to lockdown worries

Tribune News Service

New Delhi, April 15

The wholesale price index (WPI) inflation rate stood at 7.39 per cent for March 2021, the highest since October 2012, when it was 7.4 per cent, according to the provisional data released by the Department for Promotion of Industry and Internal Trade of the Commerce Ministry.

Besides WPI inflation touching a 96-month high, most of its sub-sets also touched recent highs. Primary articles inflation jumped to a 13-month high of 6.4 per cent; fuel, power, light inflation rose to 28-month high of 10.3 per cent; and manufactured products inflation was at a nine-year high of 7.3 per cent.

But the Ministry said the WPI for March last year was computed with a relatively low response rate and, therefore, the difference between the corresponding period this year has recorded a larger gap.

Inflation related woes, that are likely to last till August, come on top of a second Covid wave sweeping the country. Besides the badly affected Gujarat, Madhya Pradesh, Maharashtra and UP, news is coming of the elections having acted as super spreaders. West Bengal has recorded a 450 per cent increase in active caseload in a fortnight, Tamil Nadu 309 per cent and Kerala 111 per cent.

The day also saw the rupee turning into Asia’s worst-performing currency and is poised for more losses as localised lockdowns and restrictions begin hitting the economy.

As a result, Goldman Sachs has downgraded the GDP growth forecast for 2021 to 10.5 per cent from 10.9 per cent.

The ministry said the prices of crude oil, petroleum products and basic metal substantially increased last month as compared to the corresponding month of last year.