WPI inflation Surges To A New High of 15.88% in May Amid Rising Prices of Food Items And Crude Oil

The Wholesale price-based inflation has spiked to a new record high at 15.88% for the month of May as the prices of food items and crude oil have gone up. Meanwhile, for the month of April 2022, the WPI Inflation was recorded at 15.08%. WPI inflation was recorded at 13.11% in May 2021.

According to DRE. Reddy, CEO and Managing Partner at CRCL LLP, 'The wholesale inflation has continued to grow in the double digits. At 15.88 percent, which is mostly attributed to rise in the cost of mineral oils, natural gas, and other commodities as compared to the same month in the previous year. Higher crude oil prices and input costs still weigh on the producers and pass-through has resulted in pushing the retail inflation higher. This move also implies that manufacturers are recovering their pricing power, which was weakened due to the pandemic. A good monsoon and ease in tension will assist to lower WPI inflation within the following months, also leading to crude oil prices ultimately putting downward pressure on inflation at large'.

Earlier, India's retail inflation, measured by the Consumer Price Index or CPI fell to 7.04% in the month of May from 7.79% recorded in April, according to the data released by the statistics ministry.

According to a PTI report, The WPI-based inflation at 15.88 per cent is the highest print on record in the current (2011-12) series. Considering the old series as well, the last time WPI inflation was higher than this was in August 1991, when it was at 16.06 per cent.

The major factor that has pushed WPI Inflation to a new high of 15.88% in May month is the surging cost of food items and crude oil in spite of the various measures introduced by government to keep the prices under control. According to report, this is the 14th month of double-digit inflation.

Earlier Finance Minister Nirmala Sitharaman slashed excise duty on May 21 on petrol by Rs 8 per litre and Rs 6 per litre on diesel to keep inflation under control. Apart from these measures, several other measures were announced pertaining to tax structure imposed on crucial commodities to control the surging inflation.