New Delhi: India’s inflation rate based on the Wholesale Price Index in April is likely to remain unchanged from the previous month at 5.7%, a Cogencis poll showed.

According to the median of a poll of 23 economists, the headline inflation rate is likely to remain largely unchanged as the rise in food prices is likely to be offset by statistical effect of a higher base.

The overall index had risen 0.7% on month in April last year. The commerce and industry ministry will release the WPI inflation rate for April on Thursday.

The WPI inflation rate rose to a three-month high of 5.70% in March from 4.68% a month ago, primarily on account of increase in prices of food articles and manufactured products.

Food prices, which reversed the falling trend in March on account of the unseasonal rains, are likely to have continued to rise in April with the onset of summer, economists said.

Higher cash flow due to the elections is also likely to have pushed up prices in April. However, the cut in petrol prices during the month is likely to provide some cushioning effect.

Government-owned oil-marketing companies cut petrol prices by 1.55 rupees per ltr in April.

Though the WPI inflation is expected to remain unchanged in April, the market expects the rate based on the more widely tracked new Consumer Price Index to rise in April.

According to a Cogencis poll, the CPI (Combined) inflation rate is likely to rise to a three-month high of 8.5% in April from 8.3% in March.

The retail inflation rate, based on CPI (Combined), for April will be released today.

The Reserve Bank of India targets CPI (Combined) inflation for its monetary policy.

RBI is aiming to reduce CPI inflation rate to 8.0% by January 2015 and 6.0% by January 2016.

The central bank, which stood pat on policy rates in its first bi-monthly monetary policy in April, said it did not anticipate further policy tightening in the near term if inflation moved along the intended path.

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Free Press Journal