Wholesale Price Index inflation spikes to 2.61% in May led by food and fuel

Digital Desk: India's wholesale prices witnessed a significant surge in May 2024, rising by 2.61%, up from 1.26% in April, as per the Ministry of Commerce & Industry. This uptick was primarily driven by escalating costs in the food and fuel sectors. 

According to the ministry's press release, the annual rate of inflation based on the all-India Wholesale Price Index (WPI) was provisionally set at 2.61% for May 2024 compared to May 2023. This positive rate of inflation was mainly attributed to the increased prices of food articles, manufactured food products, crude petroleum and natural gas, mineral oils, and other manufacturing categories.

The WPI, which measures the average change in prices at the wholesale level, showed a month-on-month rise of 0.20% from April to May. The price surge was notably evident in food items and fuel. The WPI Food Index, which includes essentials such as cereals, vegetables, milk, and meat, climbed from 183.6 in April to 185.7 in May. This hike resulted in the inflation rate within the food category escalating from 5.52% in April to 7.40% in May.

Primary articles, which encompass food and minerals, saw a 0.54% increase to 187.7 in May, reflecting higher prices in food articles by 1.48% and minerals by 1.08%. On the other hand, non-food articles and crude petroleum prices experienced declines of 1.26% and 3.56%, respectively, in May compared to April.

In contrast, the fuel and power index dropped by 2.71% to 150.6 in May, mainly due to an 11.67% decrease in electricity prices. However, the prices of mineral oils and coal remained unchanged. 

Manufactured products, a crucial component of the WPI, recorded a 0.64% increase to 141.7 in May from 140.8 in April. Among the 22 groups tracked under manufactured products, 13 reported higher prices, 8 saw declines, and 1 remained steady. Significant sectors like basic metals, food products, and electrical equipment saw price hikes, whereas fabricated metal products and chemicals experienced price reductions.