WPI Inflation Goes Beyond 15% Mark, Highest Since May 2014

India's Inflation on the Wholesale Price Index (WPI) has touched a new high of 15.08% for the month of April and it is highest since May 2014, as per commerce ministry data released on May 17. The WPI inflation has surged in April from 14.55 percent for the month of March. Today's data also indicates that inflation continues to stay in the double-digit zone continuously for one year as it was recorded at 10.74 in April 2021.

According to the report, the major factors responsible for high rate of inflation for April 2022 included mounting prices of mineral oils, crude petroleum and natural gas, food articles, non-food items, food products, chemical & chemical products, mineral oils etc. when compared with the corresponding month of last financial year.

DRE. Reddy, CEO and Managing Partner at CRCL LLP said, "The wholesale inflation has stayed well above expectations yet again. This is the 13th straight month that we witness double-digit inflation at the factory level. Nearly all components of the WPI have contributed to this high inflation. The high inflation print will put further pressure on the central bank to act on rates and easy monetary policy. A good monsoon and ease in tension will lead to crude prices ultimately putting downward pressure on inflation at large".

The surge in the WPI inflation has come after reports released on May 12 on India's retail inflation measured by Consumer Price Index (CPI) soared past 7.79% due to rising fuel and food prices. The data was released by statistics ministry. The retail inflation was recorded highest since May 2014.

Earlier, Reserve Bank of India's Monetary Policy Committee held an unscheduled meeting on May 4 and announced a hike of 40-basis point in repo rate anticipating the strong rise in inflation in April. Now the RBI's Monetary Policy Committee is expected to hold its upcoming meet in June.