Wholesale Inflation Surges to 15-Month High Amid Rising Food Prices

Wholesale inflation in India has hit a 15-month high of 2.61% in May, driven by soaring food prices, especially vegetables, and higher costs of manufactured products. Severe heatwave conditions and rising global metal prices are key contributors. Retail inflation, however, has decreased to a 1-year low of 4.75%.

Wholesale inflation surged to a 15-month high of 2.61% in May, propelled by soaring food prices and costlier manufactured products. The persistent heatwave aggravated the rise, with vegetable prices hitting unprecedented highs.

The Wholesale Price Index (WPI)-based inflation has been on an upward trajectory for the past three months, climbing from 1.26% in the previous month to -3.61% in May 2023. Food articles, manufacturing, and crude petroleum are primary drivers of this inflationary trend, according to the Ministry of Commerce & Industry.

Barclays Economist Shreya Sodhani warned of a continuous rise in manufacturing costs, while ICRA Chief Economist Aditi Nayar hinted at a modest increase in headline WPI inflation to 3% in June 2024. Despite this, retail inflation has eased to a one-year low of 4.75%.