india market
High global energy and raw material prices combined with a weak rupee to fuel the fastest rise in India's wholesale prices for at least three decades, piling pressure on the central bank to order more interest rate hikes.

A surge in crude oil and commodity prices since Russia invaded Ukraine in February has pushed up prices globally, forcing many central banks to raise interest rates to tame inflation.

Wholesale prices, akin to producer prices climbed to 15.88% in May from year ago levels, staying in double-digits for a 14th straight month.

A Reuters poll of analysts had forecast a rise of 15.10%.

Prices for manufactured products, contributing around 64% to the wholesale price index, rose 10.11%, compared to 10.85% in the previous month, while fuel and power costs increased 40.62% from a year ago period.

On Monday, India reported retail prices had risen 7.04% in May from year ago levels, moderating slightly from the eight-year high of 7.79% posted in April.

The dismal reports for the two main measures of inflation led economists to expect the Reserve Bank of India (RBI) to raise key interest rates at its next policy meeting in August.

The RBI's Monetary Policy Committee (MPC) raised its benchmark repo rate INREPO=ECI by 50 basis points to 4.90% last week, after a 40 basis points hike in April, while hinting at more rate hikes to come.

A surge in crude oil and commodity prices since Russia invaded Ukraine in February has pushed up prices globally, forcing many central banks to raise interest rates to tame inflation.

"The WPI inflation at 15.9% (is) at 30 year high. Inflationary pressures persist," said D.K Joshi, an economist at CRISIL, an Indian credit rating agency.

The high rate of wholesale price inflation in May was primarily due to rise in prices of mineral oils, crude petroleum and natural gas, food articles, basic metals and chemical products, the Ministry of Commerce and Industry said in a statement.

Food prices, contributing about a quarter of the WPI index, climbed 10.89% in May, though vegetable prices rose 18.26% in May year-on-year, compared to 23.24% in the previous month.