Wholesale Inflation Soars To 12.94% In May On Fuel Price Surge Low Base…

India’s wholesale inflation hit a record high of 12.94 per cent in May driven by continued rise in fuel and commodity prices as well as due to a low base effect, data released by the government showed. Wholesale inflation came in at 10.49 per cent in April. In May 2020, wholesale prices, whose increase or decline is measured in terms of wholesale price index (WPI), witnessed deflation at (-) 3.37 per cent as demand slackened due to the pandemic induced lockdown. The latest inflation rate released by the government is the highest under the current series. “The high rate of inflation in May 2021 is primarily due to low base effect and rise in prices of crude petroleum, mineral oils viz. petrol, diesel, naphtha, furnace oil etc. and manufactured products as compared to the corresponding month of the previous year,” an official statement said.
According to data released by the commerce and industry ministry on Monday, fuel and power inflation stood at 37.61 per cent led by higher petrol and diesel prices. Fuel and power and inflation was 20.94 per cent in April and (-) 23.08 per cent a year earlier. According to CARE Ratings chief economist Madan Sabnavis fuel prices are likely to be upward bound on the back of elevated global crude oil prices amidst rebound in domestic economic activities as the second wave of coronavirus subsides. Price rise in manufacturing products that accounts for close to two-third of the index, was 10.83 per cent.

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