WPI and Retail inflation soar in May

The retail Consumer Price Index-based inflation in India soared to 6.3 per cent in May, up from 4.23 per cent in April, according to the government data released on Monday. The rising CPI inflation has breached the RBI's tolerance limit for the first time in six months. Additionally, the Wholesale Price Index-based inflation stood at 12.94 per cent amid rising prices of crude oil, manufactured goods and a low base of last year. This is the fifth straight month of uptick seen in the WPI-based inflation.

In May last year, WPI inflation was (-) 3.37 per cent and in April 2021, WPI inflation hit double digit at 10.49 per cent. This is the fifth straight month of uptick seen in the wholesale price index (WPI)-based inflation. "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.

In manufactured products, inflation stood at 10.83 per cent in May, against 9.01 per cent in the previous month. However, 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. ICRA Chief Economist Aditi Nayar said the core-WPI inflation (manufactured non-food products) hardened sharply to a series-high 10 per cent in May 2021, with a broad-based uptrend across most sub-sectors.