Key facts
- India's wholesale inflation reached a record 9.7% year-on-year in May.
- This is the first reading under the new WPI series with a 2022-23 base year.
- Fuel and power prices surged 30.3% in May, significantly contributing to the increase.
- Inflation for manufactured products rose to 7.5% and for primary articles to 5% in May.
- The Producers Price Index (PPI) also saw an increase, reaching 9.4% in May.
- The revamped WPI series now covers 957 items, up from 697 previously.
India's wholesale inflation reached a record 9.7% year-on-year in May, marking the first reading under a newly revised Wholesale Price Index (WPI) series that uses 2022-23 as its base year. This figure is higher than April's 8.3% and contrasts with a contraction of 0.2% in May of the previous year.
The revamped WPI series expands its coverage to 957 items from the previous 697, incorporating new energy sources like solar and wind, as well as nuclear electricity. Crude petroleum and natural gas have been reclassified to the fuel and power category. Fuel and power prices were the primary drivers, increasing by 30.3% in May compared to 24.9% in April, largely due to elevated global energy prices. Inflation in mineral oils surged to 49.8% and crude petroleum and natural gas increased to 61.5%.
Inflation in manufactured products rose to 7.5% in May from 6.7% in April, while inflation in primary articles increased to 5% from 3.8%. Key manufacturing sub-groups like basic metals, chemicals, and textiles also registered high inflation. The revised index saw shifts in category weightings, with fuel and power increasing to 14.1% and manufactured products declining to 63.1%.
For the first time, the government also released the Producers Price Index (PPI), which showed inflation at 9.4% in May, up from 8.1% in April. The commerce ministry stated that the WPI and PPI will be released for five years from their release date, after which they will be discontinued. Additionally, the Service Producer Price Index was released, covering seven sectors including banking, securities transactions, insurance, railways, and telecom, with varied price changes observed across these services in the fourth quarter of FY26.