WPI Inflation at a 14-month high of 4.43 per cent


The rate of inflation depending on wholesale prices in the country stood at 4.43 per cent in May 2018, a first in the past 14 months, according to the data revealed by the Commerce and Industry Ministry. The factors that caused the inflation are the rising petrol, diesel, and vegetable prices. The highest Wholesale Price Index (WPI) inflation witnessed previously was in March 2017 when the rate was 5.11 per cent.

The rising fuel and vegetable prices are few of the causes of the surge in the WPI inflation rate.

The inflation rate of food articles rose from 0.87 per cent in April 2018 to 1.60 per cent in May 2018. The cost of fuel and power saw a sharp rise from 7.85 per cent in April 2018 to 11.22 per cent in May 2018. The cost of potatoes saw a steep rise within a very short period of time. The inflation rate of potatoes was 67.94 per cent in April 2018 and 81.93 per cent in May 2018.

The inflation rate for fruits also climbed up to 15.40 per cent. Pulses, on the other hand, saw a deflation of 21.13 per cent.

Here is a tabular representation of the rise in inflation rates:

April 2018 (in per cent) May 2018 (in per cent)
Food articles 0.87 1.60
Vegetables (-)0.89 2.51
Fuel and Power 7.85 11.22
Potatoes 67.94 81.93


Further, according to the data revealed last week, retail inflation hit a 4-month high of 4.87 per cent. The cause of the same was found to be the rising fuel costs and dip in the value of the rupee.

The Reserve Bank of India recently increased the repo rate by 25 basis points fearing inflation in the near future. The inflation rate has been more than RBI’s medium-term target equal to 4 per cent. For the second half of the fiscal year, the RBI has revised the rate to 4.7 per cent.

Source: The Hindu Business Line



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