New Delhi, May 31 -- The Union finance ministry has flagged risks to the inflation outlook, citing recent fuel price hikes, global energy price volatility, rupee depreciation, the prospect of a below-normal monsoon and sharply rising wholesale prices, even as retail inflation remains within the Reserve Bank of India's target range. In its monthly economic review released on Saturday, the ministry said "The inflation dynamics of April 2026 reflect a growing divergence between relatively contained consumer prices and sharply rising wholesale prices." Retail inflation edged up to 3.48% in April from 3.4% in March, remaining below the Reserve Bank of India's 4% target with 2-6% band, while a surge in the wholesale price index (WPI) accelerated sharply to 8.3% from 3.88% during the same period. Wholesale inflation, meanwhile, was driven by elevated global energy prices, rupee depreciation and a low base effect. The ministry noted that the "recent hikes (on four occasions) in petrol and diesel prices (which have a combined share of around 5% in the CPI basket) by Rs.7.38 and Rs.7.52, respectively, may activate both the direct and indirect channels of transmission of the global price shock to the country's retail inflation." State-run oil marketing companies began raising fuel prices in phases after international crude prices surged following the outbreak of conflict in West Asia on February 28. "Overall, India's macroeconomic position in May 2026 reflects cautious resilience. Strong services exports, adequate foreign exchange reserves and a stable labour market provide a firm foundation," it said....