Government Data Shows 14-Month High for Wholesale Inflation in May

India's Wholesale Inflation Reaches 14-Month High in May: Government Data

India’s wholesale price-based inflation surged to a 14-month high in May, driven primarily by food items, according to government data released on Friday. The Ministry of Commerce & Industry reported a 2.61% increase in wholesale inflation for May, exceeding economists’ expectations of a 2.5% rise. This figure marks a significant jump from April’s year-on-year rise of 1.26%.

The ministry attributed the positive inflation rate to price hikes in various sectors, including food articles, manufactured food products, crude petroleum & natural gas, mineral oils, and other manufacturing segments.

Inflation Details

  • Food prices witnessed a notable increase, rising by 7.4% year-on-year compared to a 5.52% rise in April.
  • Vegetable prices soared by 32.42% year-on-year, showing a significant uptick from the previous month’s 27.94% rise.
  • Manufactured product prices also saw a turnaround, rising by 0.78% year-on-year after a 0.42% drop in April.
  • Fuel and power prices increased by 1.35% compared to a 1.38% rise in April.

In contrast, India’s retail inflation rate experienced a slight easing in May, dropping to 4.75%. This moderation was partly attributed to a decline in fuel prices, although food prices remained elevated, according to government data released on Wednesday.

The rise in wholesale inflation indicates growing pressure on prices across various sectors, particularly food and manufacturing. The increase in food prices, especially vegetables, reflects ongoing challenges in supply chains and market dynamics.

Economists and policymakers will closely monitor these inflation trends, as elevated inflation rates can impact consumer spending, business operations, and overall economic stability. Strategies to manage inflationary pressures, especially in essential commodities, will likely be a focus for authorities in the coming months.

India’s wholesale inflation reaching a 14-month high underscores the complex economic landscape, with varying trends across sectors. While retail inflation saw a marginal decline, concerns persist over sustained pressures on food prices and their broader implications for inflation management and economic growth.

Sources By Agencies

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