India's annual wholesale price index (WPI)-based inflation rate increased, the fastest since September 2022, as the effects of the war in the Middle East continue to drag.
The country's wholesale price inflation rose to 9.68% year over year in May, faster than the slightly modified 8.26% pace recorded in the prior month, the Ministry of Commerce and Industry said Monday.
The figure was higher than the consensus forecast of 9.10% tracked by Investing.com and 9.05% by economists polled by Reuters.
The higher-than-expected reading could indicate bullishness for the Indian rupee, Investing.com said.
Prices of wholesale fuel and power surged 30.33% in May, faster than the 24.89% rise in April, and the fastest since September 2022, the ministry said.
Fuel prices drove the WPI in both April and May, the ministry said. The increases happened amid the war in Iran, which drove state-run oil marketing companies to raise retail fuel prices four times during the month, Reuters reported separately.
Primary article prices jumped 4.99% during the month, up from a 3.78% increase in the previous month.
Manufacturing prices grew 7.48%, faster than the 6.68% rise recorded in April and the fastest since August 2022.
Food inflation surged 4.49%, a 14-month high, from 3.11% in April.
Wholesale inflation is also higher than retail inflation, which jumped 3.93% in May, close to the Reserve Bank of India's 4% target for retail inflation within a tolerance band of 2% to 6%, Reuters said.
The figure will not directly impact interest rates, Reuters said Monday, citing economists.
The wholesale inflation release also debuted new indicators such as the output and trial producer price indices, as well as service PPIs for the banking, securiites, transaction, insurance, pension fund management, airlines, railways, and telecommunications.
