Wholesale price inflation reduced to 14 months low at 0.39 percent in May, vegetables became 21.62 percent cheaper
Wholesale price inflation: In the midst of food items, manufactured products and fuel prices, the wholesale price inflation (WPI) declined to 14 months low to 0.39 percent. However, experts say that prices may increase due to geopolitical stress. The wholesale Price Index (WPI) based inflation was 0.85 percent in April and 2.74 percent in May 2024.
The Ministry of Industry said in a statement that the increase in prices of food products, electricity, other manufacturing, chemicals and chemical products, other transport equipment and non-food items etc. was the main reason for this. According to the bulk price index data, the prices of food items saw a decline of 1.56 percent in May as compared to 0.86 percent in April. The price of vegetables declined drastically. Vegetables became 21.62 percent cheaper in May, while in April their prices fell by 18.26 percent. Inflation in manufactured products was 2.04 percent as against 2.62 percent in April.Also Read: Retail Inflation: Large relief on inflation front, retail inflation came at 6 years low, 3.16% in April
Inflation in fuel and electricity was also 2.27 percent: Inflation in fuel and electricity was also 2.27 percent in May as against 2.18 percent in April. The Reserve Bank of India (RBI) mainly looks at retail inflation when creating monetary policy. Retail inflation decreased in May to 6 years low to 2.82 percent, mainly due to softening of food prices. This information was received in the data released last week. The RBI had reduced the policy interest rate by 0.50 percent to 5.50 percent this month amid softening of inflation.Also Read: Inflation Rate: Retail inflation rate reduced in February, pulses and vegetables cheap, 7 months low
Rahul Aggarwal, senior economist at the rating agency ICRA, said that despite the early arrival of the South-West monsoon, its progress stopped in the early June, which was 31 percent less than the normal level till June 15, 2025. Temporary and spatial distribution of monsoon remains important for crop forecasting and resulting food inflation.
Crude oil prices increased rapidly: He said that after increasing tension between Israel and Iran, crude oil prices have increased rapidly in the current month. Aggarwal said that some fall in the rupee with high prices of crude oil as well as the rupee against the US dollar will increase the pressure on the wholesale price index inflation for June 2025, which is expected to be around 0.6–0.8 percent in June 2025. Industry Board PHDCCI said that the decline in wholesale inflation will boost business notion, as it will reduce the cost of production. (Language)
Edited by: Ravindra Gupta
