Wholesale inflation reaches 14-month high in May, check what’s expensive

In May, wholesale inflation reached a 14-month high, according to recent government data. This surge in wholesale prices is driven by various factors, including increased costs of raw materials, supply chain disruptions, and heightened demand as economies continue to recover from the impacts of the COVID-19 pandemic. Key sectors contributing to this rise include food, fuel, and manufacturing.

According to the recent data shared by government on Friday, India’s wholesale price-inflation rose to 2.6% in May which is mainly driven by food items. As per data, the positive rate of inflation in May, 2024 is primarily due to increase in prices of food articles, manufacture of food products, crude petroleum & natural gas, mineral oils, other manufacturing etc. 

Index Numbers of Wholesale Price in India for the Month of May, 2024 (Base Year: 2011-12)

➡️ Annual rate of inflation based on all India Wholesale Price Index (WPI) number is 2.61% (Provisional) for the month of May, 2024 (over May, 2023)

➡️ The month over month change in WPI… pic.twitter.com/RKknCPb51E

— PIB India (@PIB_India) June 14, 2024

As per data, food prices rose to 7.4% while the prices for the vegetables were up by 32.42% on year against a 27.94% in previous month. Out of the 22 NIC two-digit groups for manufactured products, 13 groups witnessed an increase in prices, 8 groups have witnessed a decrease in prices and 1 group remained constant.

Some of the important groups that showed month-over-month increase in prices are basic metals, food products, computer, electronic & optical products, electrical equipment, other manufacturing etc. 

On the other hand, some of the segments have witnessed a decrease in prices, they are fabricated metal products, except machinery & equipment; other non-metallic mineral products, chemicals & chemical products, tobacco products, other transport equipment etc in May as compared to April, 2024.

It should be highlighted that this significant increase in wholesale inflation could have significant implications for the broader economy. Higher wholesale prices can eventually lead to increased consumer prices, affecting the cost of living and potentially leading to tighter monetary policies as central banks might consider measures to curb inflationary pressures.