In May, wholesale inflation increases for 3rd consecutive month at 2.61%, with higher costs for food items.

New Delhi: The wholesale price index has been on the rise for the third consecutive month in May, with a significant increase of 2.61%. This can be attributed to the surge in prices of food articles, particularly vegetables, and manufactured items.

Compared to the previous month, where the wholesale price index was at 1.26%, this is a considerable jump. Looking back to May 2023, the wholesale price index was at 3.61%, indicating a steady increase over the years.

According to a statement released by the Ministry of Commerce & Industry on Friday, the positive rate of inflation in May 2024 is mainly due to the rise in prices of food articles, as well as the manufacture of food products, crude petroleum & natural gas, mineral oils, and other manufacturing items.

The data shows that the inflation in food articles has risen by 9.82% in May, compared to 7.74% in April. The prices of vegetables have seen a sharp increase of 32.42%, up from 23.60% in the previous month. In particular, onions have seen an inflation of 58.05%, while potatoes have witnessed an inflation of 64.05%. Pulses have also seen a significant rise in inflation, at 21.95% in May.

In terms of fuel and power, inflation has marginally decreased to 1.35%, compared to 1.38% in April. While in the category of manufactured products, inflation has seen a rise of 0.78%, up from 0.42% in April.

Interestingly, the rise in the wholesale price index in May is in contrast to the retail inflation data for the same month. The Reserve Bank of India, which primarily considers retail inflation when making monetary policy decisions, had released data earlier this week, showing a decrease in retail inflation to a one-year low of 4.75% in May.

Despite this, the RBI had kept the interest rate unchanged for the eighth consecutive time earlier this month. While the wholesale price index may have gone up, the retail inflation data indicates a different trend, leading to a challenging decision for the RBI.

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