AgenciesWholesale price inflation climbed to 12.94% in May compared to -3.37% in May 2020 due to low-base effect.
Inflation surged in May on the back of rise in prices of crude petroleum, mineral oils viz. petrol, diesel, naphtha, furnace etc. and manufactured products as compared the corresponding month of the previous year.
Inflation in fuel and power surged by 37.6% while for manufactured products, which have the highest weightage, it rose by 10.8%. For primary articles inflation rose by 9.6%.
As the commodity prices are hardening, the core WPI inflation is expected to rise further.
"The core-WPI inflation (manufactured non food products) hardened sharply to a series-high 10% in May 2021, with a broad-based uptrend across most of the sub-sectors. The core-WPI inflation is expected to climb further to a new series-high 10.4-10.9% in June 2021, and sustain in double-digits until September 2021," Aditi Nayar, Chief Economist, ICRA, said.
A global recovery has pushed crude oil and prices of other commodities upwards.
This is showing up in the domestic wholesale price index along with effects of supply-side bottlenecks due to the impact of local lockdowns in May.
"The continued rise in global crude oil prices, a weaker rupee and the upward revision in domestic fuel prices remain risk factors for the upcoming WPI print. However, we expect the headline WPI inflation to recede modestly to 11.9-12.3% in June 2021, as the base starts to normalise," Nayar added.
Inflation surged in May on the back of rise in prices of crude petroleum, mineral oils viz. petrol, diesel, naphtha, furnace etc. and manufactured products as compared the corresponding month of the previous year.
Inflation in fuel and power surged by 37.6% while for manufactured products, which have the highest weightage, it rose by 10.8%. For primary articles inflation rose by 9.6%.
As the commodity prices are hardening, the core WPI inflation is expected to rise further.
"The core-WPI inflation (manufactured non food products) hardened sharply to a series-high 10% in May 2021, with a broad-based uptrend across most of the sub-sectors. The core-WPI inflation is expected to climb further to a new series-high 10.4-10.9% in June 2021, and sustain in double-digits until September 2021," Aditi Nayar, Chief Economist, ICRA, said.
A global recovery has pushed crude oil and prices of other commodities upwards.
This is showing up in the domestic wholesale price index along with effects of supply-side bottlenecks due to the impact of local lockdowns in May.
"The continued rise in global crude oil prices, a weaker rupee and the upward revision in domestic fuel prices remain risk factors for the upcoming WPI print. However, we expect the headline WPI inflation to recede modestly to 11.9-12.3% in June 2021, as the base starts to normalise," Nayar added.
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