Wholesale Price Index inflation hits record high in May
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New Delhi: The wholesale price-based inflation rose to a record high of 12.94% in May. The low base effect also contributed to the spike. A year ago, in May 2020, WPI inflation was (-)3.37%.
The Commerce and Industry Ministry said that the high rate of inflation in May 2021 is primarily due to the low base effect and rise in prices of crude petroleum, mineral oils viz. petrol, diesel, naphtha, furnace oil etc. and manufactured products as compared to the corresponding month of the previous year.
This is the fifth consecutive month in which the uptick is seen in the wholesale price index (WPI)-based inflation. WPI inflation hit double-digit 10.49% in April 2021. Inflation in fuel and power basket rose to 37.61% in May as opposed to 20.94% in April. Inflation stood at 10.83% in Manufactured products last month, against the 9,1% in April.
The Reserve Bank of India kept its interest rates unchanged at record lows. The RBI is committed to maintaining an accommodative policy stance to support the growth. RBI has pegged retail inflation at 5.1% in this fiscal ending March 2022 with risks from higher commodity prices and re-emergence of higher supply constraints.