WPI inflation rises to file excessive of 15.88% in May from 15.08% in April

The Wholesale Price Index (WPI) inflation rose to a file excessive of 15.88 per cent in May from 15.08 per cent in April, with the rise in costs of greens, fruits, milk, manufacturing, gas and energy, in keeping with information launched by the Ministry of Commerce and Industry on Tuesday.

The Wholesale Price Index-based inflation was 15.08 per cent in April and 13.11 per cent in May final 12 months.

This is the best WPI print within the 2011-12 sequence. Annual WPI inflation — inflation on the producer stage — has remained in double digits for 14 months in a row, persistently edging upwards.

“The high rate of inflation in May, 2022 is primarily due to rise in prices of mineral oils, crude petroleum & natural gas, food articles, basic metals, non-food articles, chemicals & chemical products and food products etc. as compared to the corresponding month of the previous year,” the commerce and business ministry mentioned in an announcement.

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Inflation in meals articles in May was 12.34 per cent, as costs of greens, wheat, fruits and potato witnessed sharp spike over the year-ago interval.

The price of value rise in greens was 56.36 per cent, whereas in wheat it was 10.55 per cent and in egg, meat and fish, inflation was 7.78 per cent. In the gas and energy basket, inflation was 40.62 per cent, whereas in manufactured merchandise and oil seeds, it was 10.11 per cent and seven.08 per cent, respectively. Inflation in crude petroleum and pure gasoline was 79.50 per cent in May.

Retail inflation in May was 7.04 per cent, remaining above the Reserve Bank’s inflation goal for the fifth straight month.

To tame stubbornly excessive inflation, the RBI hiked its key rate of interest by 40 foundation factors in May and 50 foundation factors in June. The central financial institution, final week, additionally raised inflation projection by 100 foundation factors to six.7 per cent for 2022-23.

Sounding a observe of warning, the Reserve Bank mentioned on Friday mentioned there’s a danger of excessive wholesale value inflation (WPI) placing stress on the retail inflation, albeit with a lag.

In its annual report, the RBI mentioned that the cost-push pressures from excessive industrial uncooked materials costs, transportation prices and international logistics, and provide chain bottlenecks proceed to impinge on core inflation.

“The substantial wedge between wholesale and retail price inflation amidst a sharp rise in manufactured products’ inflation poses the risk of a possible passthrough of input cost pressures to retail inflation with a lag, although slack in the economy is muting the pass-through,” the central financial institution famous.

(With Inputs from PTI)