The wholesale price-based inflation hit an all-time high of 12.49% in May on the back of a spike in prices of manufactured products, crude petroleum, and mineral oils.
It touched the double-digit mark of 10.49% in April (2021). This is the fifth straight month of an uptick in WPI inflation.
A low base effect of May last year also contributed to the spike in inflation in May 2021. The WPI inflation stood at (-)3.37% in May 2020.
"The high rate of inflation in May 2021 is primarily due to low base effect and rise in prices of crude petroleum, mineral oils viz. petrol, diesel, naphtha, furnace oil, etc. and manufactured products as compared to the corresponding month of the previous year," the Commerce and Industry Ministry said.
The manufactured products inflation rose to 10.8% as against 9% in the previous month, while core inflation jumped to 10% compared to 8.3% in April (2021). Fuel and power inflation jumped by 37.6% during May, against 20.94 per cent in April.
The crude oil and prices of other commodities have been pushed by global recovery. This is being manifested in the domestic wholesale price index in addition to the effects of supply-side bottlenecks because of the impact of local lockdowns in the month of May.
Inflation in food articles eased marginally to 4.31 per cent in May, even as onion prices spiked. Inflation in onion stood at 23.24 per cent in May, against (-) 19.72 per cent in April.
The RBI in its monetary policy earlier this month kept interest rates unchanged at record lows and committed to maintain an accommodative policy stance to support growth.
The central bank pegged retail inflation at 5.1 per cent in the fiscal ending March 2022, with upside risks from higher commodity prices and re-emergence of higher supply constraints amidst the current phase of lockdowns.
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