Comments
Driven by rising food prices, Wholesale Price Index-based inflation rose 0.79 per cent in May, its highest level since October 2014.
This is the second straight month that the WPI print has risen out of the disinflation zone; it rose 0.34 per cent in April. Last May, the WPI had contracted 2.2 per cent.
Food price rise to blame A surge in prices of food articles, especially pulses, sugar and vegetables, was largely the reason for this uptick.
Food article inflation — which has a weightage of about 15 per cent — rose 7.88 per cent, much higher than the 4.23 per cent in April.
The uptick in WPI came a day after retail inflation hit a 21-month high of 5.78 per cent in May.
It also comes on the heels of a 0.8 per cent contraction in industrial production in April.
The Narendra Modi government is hoping that the Met Department’s predictions of an above-normal monsoon in the June-September period will come true and help keep food prices in check.
Not monsoon-dependent However, Sunil Kumar Sinha, Principal Economist, India Ratings & Research, said that the food items that fuelled inflation in May are largely not dependent on the monsoon.
“Pulses, vegetables, meat, egg, and fish alone contributed 63.4 per cent of food inflation in May,” Sinha observed.
Richa Gupta, Senior Economist, Deloitte in India, said the Wholesale Price Index-based inflation rose in sync with trends witnessed in the retail print.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.