India: Inflation picks up again in May
June 14, 2011
In May, the wholesale price index (WPI) ? India's headline inflation measure ? added 0.73% over the previous month, which was nearly half the 1.35% increase tallied in April. Nevertheless, annual inflation accelerated to 9.1% (April: 8.7%) which, despite lower international commodity prices, overshot market expectations that had WPI inflation remaining stable at 8.7% and ended the moderating trend observed in the previous two months. The monthly WPI hike was mainly the result of higher manufactured product prices (+1.0% month-on-month), particularly in food products. In contrast, the other two main categories of the wholesale price index ? primary articles as well as fuel and power ? added a moderate 0.3% over April. Meanwhile, the slightly dated consumer price index for industrial workers (CPI-IW) increased 0.54% in April over the previous month, contrasting the flat reading recorded in March. As a result, annual CPI-IW inflation jumped from 8.8% in March to 9.4% in April. Despite the monthly hike, annual average WPI inflation inched down from 9.3% in April to 9.2% in May.