WPI inflation jumps to 13.11% in February

India's wholesale price index (WPI) inflation rose to 13.11% year-on-year in February from 12.96% in January, according to data released by the Ministry of Commerce and Industry on Monday.

The high rate of inflation last month was led by the rise in prices of mineral oils, basic metals, chemicals and chemical products, crude petroleum and natural gas, food articles and non-food articles as compared to the corresponding month of the previous year.

This is the the eleventh straight month in which WPI has been in double digits.

Inflation for manufactured products, which constitutes 64.23% to the WPI basket, soared to 9.84% year-on-year in February compared with 9.42% in January.

Fuel and power inflation marginally declined to 31.5% in February from 32.27% in the previous month. Meanwhile, the index for this category increased by 4.35% to 139.0 in February 2022 from 133.2 for the month of January 2022.

Primary articles inflation stood at 13.4% compared with 13.87% in the previous month. Vegetables inflation stood at 26.93% compared with 38.45% in the previous month.

The ministry also released export numbers today. India's merchandise exports jumped 25.1% year-on-year to $34.57 billion in February while imports soared 36% to $55.45 billion.

The country’s trade deficit -- the difference between imports and exports -- widened to $20.88 billion in February from $17.42 billion in the preceding month, the data showed.

Non-petroleum and non-gems & jewellery exports in February stood at $26.75 billion, registering a growth of 19.01% year-on-year.

Merchandise exports for the period April-February 2021-22 stood at $374.81 billion as against $256.55 billion during the period April-February 2020-21, registering a positive growth of 46.09%, the ministry said.

Exports of engineering goods increased by 32% to $9.32 billion in February. Electronics goods exports rose by 34.54% to $1.42 billion. Exports of petroleum products jumped 88.14% to $4.64 billion.

However, drugs and pharmaceutical exports slipped 1.78% to about $2 billion.

ICRA estimates India’s current account deficit (CAD) to widen by $14-15 billion (0.4% of GDP) for every $10/bbl rise in the average price of the Indian crude basket. “If the price averages US$130/bbl in FY2023, then the CAD will widen to 3.2% of the GDP, crossing 3% for the first time in a decade,” the rating agence said in a report.