Inflation based on wholesale prices rose to a record high of 12.94 per cent in May due to rise in crude oil and manufactured goods prices. In addition, wholesale price index (WPI) inflation has risen sharply in May 2021 due to the lower base effect. Let us tell you that in May 2020 last year, the WPI inflation was at a negative rate of 3.37 percent. This is the fifth consecutive month that inflation based on the Wholesale Price Index (WPI) has increased. In April 2021, WPI inflation was in double digits to 10.49 percent.
A statement issued by the Ministry of Commerce said that, “The annual rate of inflation based on monthly WPI has increased to 12.94 percent in May 2021. In May 2020, this rate was at negative 3.37 percent.” According to the statement, “The higher rate of inflation in May 2021 is mainly due to lower base effect and increase in the prices of petroleum products and manufactured products like petrol, diesel, naphtha, furnace oil etc. as compared to the corresponding month of last year.”
Fuel and power inflation rises to 37.61 per cent
Inflation in fuel and electricity rose to 37.61 per cent during the review period, from 20.94 per cent in April. Inflation in manufactured products stood at 10.83 per cent in May as against 9.01 per cent in the previous month. Food inflation declined marginally to 4.31 per cent in May, however, onion became costlier during this period.
Earlier this month, the RBI kept interest rates at a record low in its monetary policy and said that it is committed to maintain a lenient policy to boost growth.
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