- Inflation based on CPI breached RBI's target range after five months
- Retails Inflation recorded at 6.3 percent
- The Fuel and Light category remain elevated
India: Retail inflation measured by the Consumer Price Index hiked to 6.3 percent in May amidst the escalating food and fuel prices illustrated data released by the government on Monday. The inflation registered a sharp rise from 4.23 percent in April to 5.01 percent in May.
Inflation, based on Consumer Price Index (CPI), has breached the Reserve Bank of India’s (RBI) target range for the first time after five months.
Within the food items, the rate of fall in vegetable prices was at – 1.92 per cent in May, as against -14.18 per cent in the previous month. Meanwhile, the inflation rate in Food and beverages was at 5.24 per cent. Edible oil and fats scorched a rise of 4.93 percent against 25.91 percent in May.
However, inflation in fuel and light categories remained elevated at 11.58 percent during this month against 7.01 percent in the previous month.
While there were fewer supply chain disruptions during the recent pandemic lockdowns compared with last year, a general rise in inflation globally has elevated domestic price pressures. Higher global commodity prices including crude, edible oils and gold are clearly spilling over into consumer inflation.
The Reserve Bank, at its June month monetary policy meeting, estimated an average inflation rate of 5.1 per cent for the current financial year. The RBI is mandated to maintain the crucial number at 4 per cent in the medium term, with a 2-percentage point leeway on either side as part of its inflation target.