WPI inflation hits 38-mth high of 3.88% in Mar on higher fuel prices

Analysts expect WPI inflation to rise further in the coming months

New Delhi

Wholesale price inflation rose sharply to an over three-year high of 3.88% in March, driven by a spike in rates of fuel, power and manufactured items amid the West Asia crisis.

Government data released on Wednesday showed that the Wholesale Price Index (WPI)-based inflation rose for the fifth straight month in March as core inflation accelerated, despite softening of primary food items. As higher energy prices eventually generalise to other commodity prices, analysts expect WPI inflation to rise further in the coming months.

The high WPI inflation in March reflects elevated global commodity prices and the impact of the energy price shock since the beginning of the US-Israel-Iran conflict on Feb 28. WPI inflation was 2.13% in February and 2.25% in March last year.

"The positive rate of inflation in March 2026 is primarily due to an increase in prices of crude petroleum and natural gas, manufacturing, non-food articles, basic metals and food articles," the Industry Ministry said in a statement on Wednesday.

According to the latest WPI data, inflation in the fuel and power basket spiked to 1.05% in March, from a deflation of 3.78% in February. Inflation in crude petroleum surged to 51.57% during March, against a deflation of 1.29% in the previous month. Manufactured products inflation rose to 3.39% in March from 2.92% in February.

Barclays, in a research note, said that March WPI is the sharpest month-on-month increase seen since August 2023. "As global energy prices stay elevated and eventually trickle to other commodity prices, we expect WPI inflation to rise further going ahead," Barclays said, adding that it expects the RBI to persist with a pause in interest rates through 2026.

During March, the pace of hike in food articles prices eased to 1.90% from 2.19% in February.

In vegetables, inflation softened to 1.45% in March, against 4.73% in February.