India’s wholesale inflation surges to record high of 15.88 % in May 2022

India`s annual wholesale price-based inflation surged to 15.88 per cent in May, the highest level in nearly 10 years, due to a sharp jump in the prices of fuel, metal, chemicals, and food articles, the government data showed on Tuesday.

The Wholesale Price Index (WPI) based inflation has been in the double-digit for 14 months in a row. The WPI-based inflation stood at 15.08 per cent in April and 14.55 per cent in March.

In May 2021, the WPI-based inflation stood at 13.11 per cent, as per data released by the Ministry of Commerce & Industry.

The month-over-month change in the WPI index for the month of May 2022 stood at 1.38 per cent as compared to April 2022.

Reason for high inflation in May 2022

The high rate of inflation in May 2022 is primarily due to the rise in prices of mineral oils, crude petroleum & natural gas, food articles, basic metals, non-food articles, chemicals & chemical products and food products etc as compared to the corresponding month of the previous year.

The Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade released the Index numbers of wholesale price in India (Base Year: 2011-12) for the month of May 2022 (Provisional) and for the month of March 2022 (Final).

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Primary articles, which have 22.62 per cent weight in the WPI index, increased by 2.80 per cent to 179.8 (provisional) in May 2022 from 174.9 (provisional) for the month of April 2022. Prices of Crude Petroleum & Natural Gas (8.52 per cent), Food Articles (2.40 per cent), Minerals (1.73 per cent) and Non-food Articles (1.52 per cent) increased in May 2022 as compared to April 2022.

The index for Fuel & Power increased by 2.25 per cent to 154.4 (provisional) in May 2022 from 151.0 (provisional) for the month of April 2022. Prices of Mineral Oils (3.34 per cent) increased in May 2022 as compared to April 2022. Prices of coal and electricity remain unchanged.

The index for Manufactured Products increased by 0.56 per cent to 144.8 (provisional) in May 2022 from 144.0 (provisional) for the month of April 2022. Out of the 22 NIC two-digit groups for manufactured products, 19 groups have witnessed an increase in prices while 3 groups have witnessed a decrease in prices.

The increase in prices is mainly contributed by chemicals and chemical products, food products, textiles, machinery and equipment, and electrical equipment.

Some of the groups that have witnessed a decrease in prices are basic metals, computers, electronic and optical products, other manufacturing in May 2022 as compared to April 2022.

The Food Index consisting of `Food Articles` from the Primary Articles group and `Food Product` from the Manufactured Products group has increased from 172.9 in April 2022 to 176.1 in May 2022.

The rate of inflation based on the WPI Food Index increased from 8.88 per cent in April 2022 to 10.89 per cent in May 2022.

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