Wholesale Prices Decline 3% in May as COVID-19 Pulls Down Demand

New Delhi: Wholesale prices entered a deflationary zone in May, falling 3.2%, as the month saw a decline in demand amid an economic hit in the wake of the coronavirus pandemic.

While overall Wholesale Price Index (WPI) numbers were not unavailable for April, in May last year the WPI-based inflation rate had stood at 2.79%.

Among major categories, food items showed a slight inflation of 1.13% in May. But vegetable prices in this category declined 12.48%. Pulses continued to see elevated inflation, even as it declined to 11.91% in May from 12.31% the previous month.

Potato was one major item within food articles that saw major inflationary pressure points. However, here too, inflation declined to 52.2% from 59.40%.

Overall CPI numbers for May were not released, but food inflation crossed 9%.

Softening global crude prices led to a fall in the prices of petroleum though the government—both the Centre and some state governments — raised taxes on them. For the third month in a row, fuel and power category saw prices deflating. These came down by 19.83% in May against 10.12% in the previous month and 2.93% in March. Petrol, diesel, liquefied petroleum gas (LPG)— all saw prices falling in May.

Manufactured products, which have an overwhelming weight of 64% in WPI, saw prices falling by 0.42% in May. The April numbers were missing, but inflation in this category remained sub-one per cent since January this year. In fact, these items saw a deflation of 0.25% in December 2019.

By arrangement with Business Standard.

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