WPI inflation rises to record high of 15.88% in May from 15.08% in April

This is the highest WPI print in the 2011-12 series. Annual WPI inflation — inflation at the producer level — has remained in double digits for 14 months in a row, consistently edging upwards.

“The high rate of inflation in May, 2022 is primarily due to 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 commerce and industry ministry said in a statement.

Inflation in food articles in May was 12.34 per cent, as prices of vegetables, wheat, fruits and potato witnessed sharp spike over the year-ago period.

The rate of price rise in vegetables was 56.36 per cent, while in wheat it was 10.55 per cent and in egg, meat and fish, inflation was 7.78 per cent. In the fuel and power basket, inflation was 40.62 per cent, while in manufactured products and oil seeds, it was 10.11 per cent and 7.08 per cent, respectively. Inflation in crude petroleum and natural gas was 79.50 per cent in May.

Retail inflation in May was 7.04 per cent, remaining above the Reserve Bank’s inflation target for the fifth straight month.

To tame stubbornly high inflation, the RBI hiked its key interest rate by 40 basis points in May and 50 basis points in June. The central bank, last week, also raised inflation projection by 100 basis points to 6.7 per cent for 2022-23.

Sounding a note of caution, the Reserve Bank said on Friday said there is a risk of high wholesale price inflation (WPI) putting pressure on the retail inflation, albeit with a lag.

In its annual report, the RBI said that the cost-push pressures from high industrial raw material prices, transportation costs and global logistics, and supply chain bottlenecks continue to impinge on core inflation.

“The substantial wedge between wholesale and retail price inflation amidst a sharp rise in manufactured products’ inflation poses the risk of a possible passthrough of input cost pressures to retail inflation with a lag, although slack in the economy is muting the pass-through,” the central bank noted.

(With Inputs from PTI)