Retail inflation spikes to 7-month high of 3.05 pc in May on costlier food articles

Retail inflation spiked to a seven-month high of 3.05 per cent in May, though remaining within RBI's comfort level, as kitchen items like vegetables, meat and fish turned dearer, government data showed Wednesday. The consumer price index (CPI) based retail inflation for April was revised marginally upwards to 2.99 per cent from the earlier estimate of 2.92 per cent, as per the data released by the Central Statistics Office (CSO) of the Ministry of Statistics and Programme Implementation.

Retail inflation stood at 4.87 per cent in May 2018. The previous high was in October 2018, when the retail inflation print came in at 3.38 per cent.

Vegetables prices witnessed a sharp rise during May this year at 5.46 per cent as against 2.87 per cent in April 2019.

Prices of meat and fish went up by 8.12 per cent (from 7.55 per cent), while the inflation print for cereal and products rose to 1.24 per cent (from 1.17 per cent) in May this year.

However, prices of fruits continued to show a deflationary trend with an inflation rate of (-)5.17 per cent against (-)4.89 per cent in the preceding month.

For fuel and light category, inflation stood at 2.48 per cent as against 2.56 per cent in April.

Inflation for the overall food basket, based on consumer food price index, increased to 1.83 per cent in May as against 1.10 per cent a month earlier, the data showed.

Retail inflation is a crucial data point, keenly watched by the Reserve Bank while deciding its monetary policy.