Retail inflation based on Consumer Price Index eased to 7.04 per cent in May

Retail inflation based on Consumer Price Index (CPI) eased to 7.04 per cent in May from 7.79 per cent in April this year. As per the Ministry of Statistics and Programme Implementation (MoSPI) data released today, inflation slipped mainly due to easing prices in the "Food & Beverages" and "Fuel & light" sections.

Food inflation stood at 7.84 per cent in the corresponding period against 8.31 per cent in the previous month. Inflation for fuel and light was 9.54 per cent in May this year against 10.8 in the preceding month.

Food & Beverages have a weightage of more than 54 per cent in Consumer Price Index while spending on Fuel & light weights around eight per cent in the index.

Commenting on CPI Inflation Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, said, "May inflation came broadly inline with our expectations. We expect the 1QFY23 average at 7.3%— lower than RBIs recently upward aggressive revised reading of 7.5%. Overall we expect CPI inflation to average 6.5%, although risks remain on the upside depending on the evolving geopolitical and global tightening process. Even as the headline inflation is expected to be softer than RBIs 1Q readings, the need for frontloaded actions remains intact. We thus continue to see repo rate at 5.75-6% by end of FY2023."

The government has mandated the central bank to maintain retail inflation at four per cent with a margin of two per cent on either side for five years ending March 2026.

India's Inflation Rates Month-on-Month (MoM)

• May CPI at 7.04 per cent against 7.79 per cent
• Food inflation at 7.97 per cent against 8.38 per cent
• Rural Inflation at 7.01 per cent against 8.38 per cent
• Urban inflation at 7.08 per cent against 7.09 per cent
• Vegetable inflation at 18.26 per cent against 15.41 per cent
• Pulses inflation at -4.2 per cent against 1.86 per cent
• Fuel & Light Inflation at 9.54 per cent against 10.80 per cent
• Clothing & Footwear Inflation at 8.85 per cent against 9.85 per cent
• Housing Inflation at 3.71 per cent against 3.47 per cent
• May Core CPI Inflation at 6.2 per cent against 7 per cent