Rising oil prices take toll on WPI

The wholesale price index for the month of May stood at 4.43 per cent against 3.18 per cent in the previous month of April. The significant surge in WPI was largely due to higher oil prices in the international market.

The Brent crude prices have surged 14.6 per cent YTD and is currently trading at US$76.5 per barrel. This has taken a toll on the wholesale price index, which hit a 14-month high. The prices of fuel & power rose by 11.2 per cent during the period.

While the prices of manufactured products rose by 3.73 per cent, followed by primary articles 3.16 per cent and food articles by 1.16 per cent taking the total index up at 4.43 per cent for the month of May.

The CPI and WPI for the month of May have risen significantly strengthening the possibility of rate hike in the upcoming monetary policies. The higher oil prices will continue to remain a headwind for the growth of the emerging market economies as rising interest rates cast shadow on the credit offtake in the economy.