The wholesale (WPI) inflation stood at 12.94 percent in May as against CNBC-TV18 prediction of 13.61 percent, data released by the commerce ministry on Monday showed.
The wholesale price-based inflation accelerated on the back of rising prices of crude oil and manufactured goods. The low base effect also contributed to the spike in WPI inflation in May 2021. In May 2020, WPI inflation was at (-) 3.37 percent.
This is the fifth straight month of uptick seen in the wholesale price index (WPI)-based inflation. In April, 2021, WPI inflation hit double-digit at 10.49 percent.
”The high rate of inflation in May 2021 is primarily due to 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,” the Commerce and Industry Ministry said.
Inflation in fuel and power basket spiked to 37.61 percent during May, against 20.94 percent in April. In manufactured products, inflation stood at 10.83 percent in May, against 9.01 percent in the previous month.
However, inflation in food articles eased marginally to 4.31 percent in May, even as onion prices spiked. Inflation in onion stood at 23.24 percent in May, against (-) 19.72 percent in April. The RBI in its monetary policy earlier this month kept interest rates unchanged at record lows and committed to maintaining an accommodative policy stance to support growth.
According to Prof Krupesh Thakkar, CFA, HoD, Financial Markets, ITM B-School there has been a persistent rise in the manufacturing price index owing to an increase in commodity price.
"Though RBI might not look into these numbers too cautiously, these cost-push pressures would be seen in the Retail Inflation with a lag. Of course, the yearly Consumer Price Index (CPI) figures do depend on its segment weight-age and relative base impact, but these pressures cannot be ignored," Thakkar said.
With inputs from PTI
First Published: IST