Wholesale price inflation in India surged to 9.68 per cent in May, up from 8.26 per cent in April, driven by a sharp increase in fuel and power, manufactured goods, and food items. The Commerce and Industry Ministry released the Wholesale Price Index (WPI) data on Monday, revising the base year to 2022-23 from 2011-12.
Fuel and power inflation skyrockets
Inflation in the fuel and power category jumped to 30.33 per cent in May, compared to 24.89 per cent in April. Crude petroleum inflation rose to 61.51 per cent from 56.31 per cent in the previous month, reflecting the impact of the West Asia crisis and the effective blockade of the Strait of Hormuz, through which most crude oil is imported to India.
Food and manufactured items see price rise
Food article inflation stood at 3.6 per cent in May, up from 2.43 per cent in April. Manufactured products inflation increased to 7.48 per cent from 6.68 per cent during the same period, according to official data.
Retail inflation also climbs
Retail inflation, measured by the Consumer Price Index (CPI), also surged to a 16-month high of 3.93 per cent in May, compared to 3.48 per cent in April. The Reserve Bank of India (RBI), which primarily considers CPI for monetary policy, has been mandated by the government to keep headline inflation at 4 per cent with a 2 per cent margin on either side.
Earlier this month, the RBI raised its inflation projection for the current fiscal year to 5.1 per cent from 4.6 per cent, citing mounting input costs due to the pass-through of higher global energy prices to retail petrol and diesel prices. Rising global crude oil prices led to a Rs 7.50 per litre increase in petrol and diesel prices in the second half of May.
