Retail inflation eased marginally in May due to a statistical base effect from the near eight-year high in April and moderation in food and some non-food prices. But it still remained above RBI’s upper tolerance level of 6% for the fifth consecutive month. Data released by the National Statistical Office (NSO) on Monday showed retail inflation, as measured by the consumer price index (CPI) rose an annual 7%, slightly slower than the 7. 8% in April but above the 6. 3% recorded in May 2021. The food price index cooled a bit in May to near 8% from 8. 3% in April. Urban inflation was higher at 7. 1%, while rural recorded a 7% rise. Core inflation (minus food and fuel) moderated but hovered near 6% level, highlighting the entrenched price pressures.
Economists said several measures undertaken by the government — such as cut in excise duty on petrol and diesel, ban on export of wheat and Indonesia’s move to lift export curbs on palm oil — have also calmed prices in May and more impact would be visible in the June numbers. The data showed vegetables prices rose an annual 18. 3% in May, oils & fats by 13. 3%, and both fuel & light as well as transport & communication by 9. 5%.