May WPI inflation surges to 6.01 per cent; highest since Dec 2013

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May WPI inflation surges to 6.01 per cent; highest since Dec 2013
May WPI inflation surged to 6.01 per cent, the highest level since December 2013, adding to fresh worries for the new Government.

Manufactured products inflation rose to 3.55 per cent vs 3.15 per cent (month-on-month). Core inflation on the other hand edged upward to 3.8 per cent as against 3.4 per cent (month-on-month). Food articles inflation which has been one of the reasons for concern rose sharply to 9.5 per cent in comparison to 8.64 per cent for the month of April 2014. The food articles index was up 2.6 per cent (month-on-month).

The index for manufactured group and the fuels group rose 0.5 per cent each, month on month.

Today's rise in inflation is not good news for the government and the Reserve Bank of India (RBI). In fact, the sharper than expected rise would now leave the RBI concerned and may lower expectations of a possible rate cut anytime soon.

The March WPI inflation numbers have also been revised upwards to 6 per cent from 5.7 per cent earlier.

The stock markets reacted negatively to the higher than expected inflation data with the Nifty dropping sharply by 34 points. The rupee had crossed the 60 levels mark.

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