NEW DELHI, (Reuters) – India’s wholesale inflation rate accelerated in March to 14.55%. This marks the end of a double-digit year as Indian firms struggle with rising input prices and pass higher prices on to their customers.

The rising input costs of products like fuel, metals, and chemicals has pushed up wholesale price, which is a proxy to producer prices. Economists say this is putting pressure on retail prices.

As fuel prices increased by 34.52% compared with their 31.50% rise in February, March’s number was more than 13% as predicted in a Reuters poll.

In March, headline retail inflation increased to 6.95%, the highest rate in 17 month and well above the limit of central bank tolerance for a third straight monthly, placing pressure on bank to raise interest rates.

From their 150-basis point estimate, economists revised their inflation forecasts for the next months and increased their expectations of central bank rate increases by as much as 200 basis points in the third quarter 2023.

In a statement earlier in the month, Reserve Bank of India indicated that they had begun to abandon their ultra-loose Monetary Policy, which has its key lending interest at an all-time low. Instead, its priority shifts to combating rising inflation after the Russia-Ukraine War.

According to data, the wholesale manufactured product prices rose by 10.71% versus 9.84% last month. Food prices, however, increased at an 8.71% pace compared to 8.47% the preceding month.