Rise in wholesale inflation in India
Inflation in India’s wholesale prices accelerated to a 15-month high of 2.61% in May, more than double April’s pace, with food inflation surging to a 10-month peak of 7.4% driven by steeper prices for vegetables, fruits, pulses and cereals, and a resurgence of price rise in manufactured products after 14 months of deflation.
Reasons for Food Price Increase
The heatwaves in May helped fire up the inflation rate for vegetables to the highest level in nine months at 32.4%, and a six-month high of 5.8% for fruits.
Spikes in vegetable prices were partly due to supply shortfalls and that the heatwave aggravated the challenge
Impact on Consumers
The WPI spike is a major concern as it will keep up the pressure on the inflation till the next crop comes
Elevated food inflation at the wholesale level is worrisome as this would keep retail food prices firm even going forward, which makes it difficult especially for people with limited finance source depending majorly on retail shops
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