India’s WPI inflation accelerates to 15.88% in May, highest since 2012

India’s annual wholesale price-based inflation rose to a record 15.88 per cent in May, highest in the current series launched in 2012, government data showed on Tuesday.

May’s figure was higher than 15.10% forecast in a Reuters poll of analysts, and compared to 13.11 per cent in May 2021.

During the month, inflation in food articles rose to 10.89 per cent, from 8.88 per cent in April. Vegetable inflation was 56.36 per cent, against 23.24 per cent in April.

Inflation in manufactured items was 10.11 per cent in May, against 10.85 per cent in April.

In the fuel and power basket, the rate of price rise was 40.62 per cent during the month.

The retail inflation rate for May 2022 cooled from the eight-year high in April and came in at 7.04 per cent on the back of the base effect and cheaper food prices.

The excise duty cuts for petrol and diesel and duty cuts on other items may have played a part in cooling inflation.

Last week, the six-member Monetary Policy Committee unanimously voted to increase the benchmark policy rate by 50 basis points, thereby taking the repo rate to 4.90 per cent. While the real GDP growth forecast for FY23 has been retained at 7.2 per cent, the inflation projection for the year has been increased to 6.7 per cent.

The Monetary Policy Committee noted inflation was likely to remain above the upper tolerance threshold of 6 per cent through the first three quarters of FY23.

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