India's wholesale price inflation climbs to 9.06 per cent in May

The annual rate of inflation based on the wholesale price index (WPI) in the country rose 39 basis points year-on-year to 9.06 per cent (provisional) during May 2011 from 8.66 per cent (provisional) in the previous month, prompting calls by finance minister Pranab Mukherjee to keep a close watch on price movements.

With core inflation (that is other than food, fuel and power inflation) rate rising to 8.71 per cent in May 2011 from 7.93 per cent in April 2011, the finance minister said the government would keep a close watch on the developments - both domestic and international - in the coming months and take appropriate adjustments to check inflation.

"We would keep a close watch on developments, both domestic as well as international, in the coming months and make appropriate adjustments as we go along," Mukherjee said.

Core inflation, however, was lower in May 2011, compared to 10.34 per cent during the corresponding month of the previous year. At 9.06 per cent in May 2011, the WPI inflation rate was also lower than the level of 10.48 per cent recorded in may 2010.

The build-up of inflation so far during the financial year was 1.47 per cent compared to a build-up of 2.05 per cent in the corresponding period of the previous year.

Mukherjee said the picture for the latest month is however mixed. While food and primary inflation has declined, core inflation continues to harden and this posed some concerns, which will have to be addressed, he said.