Sector Trends     12-Jun-24
WPI Inflation Projections: Expects to jump to 2.7% in May 2024
CPI inflation eased slightly to 4.75% in May 2024 from 4.83% in April 2024
Office of the Economic Advisor to Ministry of Commerce and Industry, Government of India is scheduled to release the Wholesale Price Index (WPI) based inflation data (Base 2011-12=100) for the month of May 2024 on 14 June 2024. The WPI inflation for May 2024 is expected to jump to 2.7% from 1.3% in April 2024.

Capital Market conducted the poll amongst economists for their projections of inflation figure for May 2024. As per the results of poll, the inflation rate is projected to accelerate to 2.7% in May 2024. Economists in the poll have projected WPI inflation in the range of 2.67-2.90% for May 2024. The median of the economists forecast's for inflation of May 2024 stood at 2.7%, while the average was also at 2.7%.

CPI Inflation: May 2024

The all-India general CPI inflation declined to 4.75% in May 2024 (new base 2012=100), compared with 4.83% in April 2024. The corresponding provisional inflation rate for rural area was 5.28% and urban area 4.15% in May 2024 as against 5.43% and 4.11% in April 2024. The core CPI inflation declined to 3.12% in May 2024 compared with 3.25% in April 2024.

The cumulative CPI inflation has rose to 4.79% in April-May FY2025 compared with 4.51% in April-May FY2024.

Among the CPI components, inflation of food and beverages increased to 7.87% in May 2024 from 7.87% in April 2024. Within the food items, the inflation for oils and fats increased to (-) 6.71%, fruits 6.68% and vegetables 27.33%. Further, the inflation for pulses and products rose to 17.14%, egg 7.62% and cereals and products 8.69%. However, the inflation for spices declined to 4.27%, meat and fish 7.28% and milk and products 2.62% and prepared meals, snacks, sweets etc. 3.35% and sugar and confectionery 5.70% and non-alcoholic beverages 2.42% in May 2024.

The inflation for housing declined to 2.56%, while that for miscellaneous items eased to 3.41% in May 2024. Within the miscellaneous items, the inflation for transport and communication declined to 0.97%, household goods and services 2.51%, education 4.07%, health 4.20% and recreation and amusement 2.51%, while the inflation for personal care and effects increased to 7.72% in May 2024.

The inflation for clothing and footwear declined to 2.74%, while the CPI inflation of fuel and light rose to (-) 3.83% in May 2024.

WPI Inflation: April 2024

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, increased to 1.3% in April 2024 from 0.5% in March 2024. Inflation for all the three major sub-groups - primary articles, fuel and power group and manufactured products group further increased contributing to the overall increase in inflation in April 2024. The core inflation (manufactured products excluding foods products) moved up to (-) 0.7% in April 2024 from (-) 1.2% March 2024.

The WPI inflation is retained unchanged at 0.2% for February 2024 from 0.2% reported at provisional level.

Inflation of primary articles rose to 5.0% in April 2024 from 4.5% in March 2024. The inflation for fuel and power group inflation gained to 1.4% from (-) 0.8% in March 2024. Further, manufactured products inflation also moved up to (-) 0.4% in April 2024 from (-) 0.8% in March 2024.

Inflation of food items (food articles and food products) increased to 5.5% in April 2024 from 4.6% in March 2024. Meanwhile, inflation of non-food items (all commodities excluding food items) also rose to (-) 0.4% in April 2024 from (-) 1.0% in March 2024.

The contribution of primary articles to the overall inflation of 1.3% rose to 133 basis points (bps) in April 2024, from contribution of 118 bps to 0.5% inflation in March 2024. The contribution of fuel product group increased to 18 bps against (-) 10 bps in March 2024, while that of manufactured products rose to (-) 26 bps in April 2024 from (-) 51 bps in March 2024.

The contribution of food items (food articles and food products) to inflation of 1.3% in April 2024 increased to 155 bps from 129 bps to 0.5% in March 2024. Meanwhile, the contribution of non-food items (all commodities excluding food items) gained to (-) 26 bps in April 2024 from (-) 75 bps in March 2024.

FAO Food Price Index: May 2024

The benchmark for world food commodity prices increased for the third consecutive month in May, as higher prices of cereals and dairy products outweighed decreases in quotations for sugar and vegetable oils, as per the Food and Agriculture Organization of the United Nations (FAO).

The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 120.4 points in May, up 0.9% from its revised April level, while it remained down 3.4% from its level a year ago and 24.9% below its March 2022 peak.

The FAO Cereal Price Index rose by 6.3% from April, powered higher by rising global wheat export prices, reflecting growing concerns about unfavourable crop conditions curbing yields for the 2024 harvests in major producing areas including parts of Northern America, Europe and the Black Sea region. Maize export prices also increased in May, pushed up by production concerns in both Argentina, due to the Spiroplasma disease (also known as corn stunt disease), and Brazil, due to unfavourable weather, as well as spillover effects from the wheat markets and limited selling activity in Ukraine. The FAO All-Rice Price Index rose by 1.3% in May.

The FAO Dairy Price Index increased by 1.8% from April, underpinned by increased demand from the retail and food services sectors ahead of the summer holidays as well as market expectations that milk production in Western Europe may fall below historical levels. Renewed import demand for spot supplies from some countries in the Near East and North Africa also lifted dairy prices.

The FAO Sugar Price Index, meanwhile, decreased by 7.5% from April, mainly driven by pressure from the good start of the new harvest season in Brazil. Lower international crude oil prices also exerted downward pressure on sugar prices, by lowering demand.

The FAO Vegetable Oil Price Index declined by 2.4% from April. Lower palm oil quotations due to seasonal output increases and ongoing weak global demand more than offset higher prices of soy oil, due to increasing demand from the biofuel sector, and firmer prices of rapeseed and sunflower oils due mainly to diminishing export availabilities in the Black Sea region.

The FAO Meat Price Index decreased marginally, by 0.2%, as international prices of poultry and bovine meats fell while those of pig and ovine meats increased.


As per the RBI, rising incidence of adverse climate events impart considerable uncertainty to the food inflation trajectory. Market arrivals of key rabi crops, particularly pulses and vegetables, need to be closely monitored in view of the recent sharp upturn in prices. Normal monsoon, however, could lead to softening of food inflation pressures over the course of the year. Pressure from input costs have started to edge up and early results from enterprises surveyed by the Reserve Bank expect selling prices to remain firm. Volatility in crude oil prices and financial markets along with firming up of non-energy commodity prices pose upside risks to inflation.

Economists Projections for WPI Inflation (%) - May 2024
Organization Projection (%)
Bank of Baroda 2.7
Care Ratings 2.7
ICRA 2.9
State Bank of India 2.7
Low 2.7
High 2.9
Average 2.7
Median 2.7
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