Retail Inflation Rises to 3.93% in May on Higher Food Prices
Food inflation climbs to 4.78% as RBI warns of fuel price impact on inflation outlook
- Retail inflation rises to 3.93% in May from 3.48% in April
- Food inflation increases to 4.78% during the month
- Tomato, ginger and precious metal jewellery among top inflation drivers
- RBI projects inflation at 5.1% for current fiscal
GG News Bureau
New Delhi, 13th June: India’s retail inflation edged higher to 3.93 per cent in May from 3.48 per cent in April, driven mainly by a rise in food prices, according to data released by the National Statistical Office (NSO) on Friday.
The Consumer Price Index (CPI)-based food inflation stood at 4.78 per cent in May, compared with 4.2 per cent in the previous month, indicating continued pressure on household food budgets.
Among commodities, precious metal jewellery recorded the highest inflation during the month, followed by tomato, ginger, raisin (kishmish) and monacca. On the other hand, potato, peas, motor cars and jeeps, cumin (jeera), and motorcycles and scooters registered the lowest inflation rates at the all-India level.
The latest inflation figure remains within the Reserve Bank of India’s mandated target range. The central bank has been tasked by the government with maintaining headline inflation at 4 per cent, with a tolerance band of 2 percentage points on either side.
However, concerns over future price pressures remain. Earlier this month, the RBI revised its inflation forecast for the current financial year upward to 5.1 per cent from the earlier projection of 4.6 per cent.
The central bank attributed the revision largely to rising input costs and the impact of higher global energy prices being passed on to domestic fuel consumers.
Retail fuel prices have increased significantly since May, with petrol prices rising cumulatively by 7.4 per cent and diesel prices by 8.4 per cent.
According to the RBI, the increase in fuel prices is expected to have a direct impact of around 36 basis points on headline inflation. The central bank also cautioned that second-round effects from higher transportation and production costs could further influence consumer prices in the coming months.
Economists will closely monitor inflation trends in the coming quarters as food prices and energy costs continue to shape the broader inflation outlook.
