Falling food prices soften May inflation
CPI retreats to 7.04% from 7.79% in Apr; However, it remains above RBI's upper tolerance level for 5th consecutive month
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New Delhi: Retail inflation eased to 7.04 per cent in May, mainly on account of softening food and fuel prices as the government as well as the RBI stepped in to control spiralling price rise by way of duty cuts and repo rate hike. However, the inflation print stayed above the Reserve Bank's upper tolerance level of 6 per cent for the fifth month in a row. The Consumer Price Index (CPI) based retail inflation was 7.79 per cent in April. In the year-ago month of May 2021, retail inflation stood at 6.3 per cent.
Inflation in the food basket in May 2022 was at 7.97 per cent, down from 8.31 per cent in the previous month, as per data released by the National Statistical Office (NSO) on Monday. The food basket has weightage of 39.06 per cent in the overall Consumer Price Index. As per the data, the inflation print in 'cereals and products' segment eased to 5.33 per cent in May as against 5.96 per cent in the preceding month, while that for 'oil and fats' softened to 13.26 per cent from 17.28 per cent.
The rate of price rise for fruits slowed to 2.33 per cent from 4.99 per cent. However, vegetable prices accelerated 18.26 per cent as against 15.41 per cent in April. Among others, the prices of eggs and 'pulses and products' showed deceleration, with negative inflation prints of (-)4.64 per cent and (-)0.42 per cent, respectively. In the 'fuel and light' category, inflation during the month softened a tad at 9.54 per cent from 10.80 per cent in April. The Reserve Bank, which factors in the CPI in its monetary policy, had earlier this month raised the inflation forecast for the current financial year to 6.7 per cent from its previous estimate of 5.7 per cent.
