A significant increase in food and fuel prices pushed the wholesale price-based inflation for the month of May to 4.43 per cent. The latest Wholesale Price Index (WPI) number rose highest since March 2017 when it touched 5.11 per cent. The annual rate of inflation, based on monthly WPI, stood at 3.18 per cent in April, while it was 2.18 per cent in March.
As per the latest data, the retail inflation also rose to 4.87 per cent in May as fuel prices shot up during the month and food items such as fruits and vegetables turned costlier as compared to the same month last year.
The government data released on Thursday says inflation in food articles was 1.6 per cent in May compared to 0.87 per cent in the preceding month. Inflation in vegetables climbed to 2.51 per cent in May, while for 'fuel and power' basket, inflation rose sharply by 11.22 per cent in May from 7.85 per cent in April. Staple foods like potato spiked by 81.93 per cent compared to 67.94 per cent in April. Fruits and pulses grew 15.40 per cent and 21.13 per cent.
With a significant rise in crude oil in the international market from $66 per barrel in April to $74 in May, petroleum products also rose to a record high in India; the price of petrol touched Rs 78.43 in Delhi on May 29. The recent cut in petrol and diesel prices, however, came as a relief to consumers ever since the oil marketing companies hiked the fuel prices by over Rs 4 in 16 days.
In its by-monthly review, the Monetary Policy Committee of the Reserve Bank of India (RBI) on June 7 had hiked the repo rate by 25 basis points to 6.25 per cent while maintaining a neutral stance. Experts suggest the central bank may also increase the repo rate in August to meet the inflation target as the rising inflation might eat into wages and input costs. The central bank has marginally revised its inflation projection for the current fiscal on firming crude oil prices in the global market.