Key facts
- India's wholesale inflation hit 9.7% year-on-year in May.
- This is the first reading under a new Wholesale Price Index (WPI) series.
- Fuel and power prices were the primary drivers of the inflation increase.
- Manufactured products and primary articles also contributed to the rise.
- Wholesale price inflation was reported at 9.68% in May.
- Rising oil costs due to Middle East conflict influenced the surge.
- Wholesale inflation is higher than retail inflation.
- The inflation increase is not expected to immediately impact interest rates.
- India has launched a Producer Price Index (PPI) for goods and services.
- The government plans to phase out the WPI within five years.
- The PPI aligns with international practices and IMF recommendations.
India's wholesale inflation has reached a record high of 9.7% year-on-year in May, according to the first data released under a revised Wholesale Price Index (WPI) series. This significant increase was predominantly fueled by escalating prices in the fuel and power sectors. Manufactured products and primary articles also contributed to the overall rise in wholesale prices.
The surge in wholesale inflation to 9.68% in May is attributed to soaring fuel and manufactured goods prices, with oil costs being a key factor due to Middle East conflict-related price hikes. This rate is higher than India's retail inflation. However, the Reserve Bank of India is not expected to immediately adjust interest rates in response to this data.