India's wholesale price index (WPI) inflation rose sharply to 9.68% in May 2026, compared to 8.42% in April, driven primarily by higher fuel prices, according to data released by the Ministry of Commerce and Industry on June 15.
Key Drivers of Inflation
The increase was largely attributed to a rise in fuel and power prices, which saw a significant uptick. Food articles also contributed to the inflationary pressure, though at a slower pace.
Fuel and Power
Fuel and power inflation stood at 15.2% in May, up from 13.8% in April. This was the main contributor to the overall WPI inflation spike.
Manufactured Products
Inflation in manufactured products remained elevated at 7.1%, slightly lower than the previous month's 7.3%, indicating some moderation in core inflation.
Comparison with Retail Inflation
The WPI inflation reading comes after retail inflation, measured by the Consumer Price Index (CPI), rose to 7.5% in May, staying above the Reserve Bank of India's (RBI) comfort zone. The RBI has been raising interest rates to curb inflation.
Impact on Monetary Policy
Economists expect the RBI to continue its hawkish stance in upcoming policy meetings, with another rate hike likely in August to contain inflationary pressures.
The government data also showed that the inflation rate for primary articles was 8.2% in May, while food inflation stood at 6.5%.
Outlook
Analysts predict that WPI inflation may remain elevated in the near term due to global crude oil price volatility and supply chain disruptions. However, a normal monsoon could ease food prices in the coming months.
