Updated: Mon, 13 Jun 2022 08:06 PM IST
New Delhi | Jagran Business Desk: Retail Inflation rate at 7.04 per cent has eased in May 2022, after softening of food prices a government report showed on Monday. This fall came after retail inflation touched an eight-year high of 7.79% in April. In May 2021, the retail inflation stood at 6.3 per cent.
A surge in crude oil and commodity prices since Russia invaded Ukraine in February has pushed up consumer prices globally, forcing many central banks to raise interest rates to tame inflation. Consumer price index-based inflation rose 7.04% in May year-on-year, helped by slower increases in food prices, govt date on Monday showed.
Meanwhile, May's print was marginally lower than the 7.10% forecast by economists in a poll conducted by news agency Reuters, after the government cut taxes on petrol and diesel and put export restrictions on food items including wheat and sugar.
The dip in prices was likely to be temporary, economists said, as the heatwave in June has pushed up prices of vegetables, while the government cut estimates of wheat production because of dry spells in northern India.
"A lower print than that of April is mainly on account of statistical base effect and reduction in central excise duties on petrol and diesel," said Kunal Kundu, an economist at Societe Generale, noting inflation had not yet peaked.
The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) raised its benchmark repo rate by 50 basis points to 4.90% last week, after a 40 basis point hike in April, while hinting at more rate hikes to come.
The MPC will meet from Aug. 2-4 and is expected to raise rates by 25-50 basis points. Food inflation, which accounts for nearly half the CPI basket, rose 7.97% year-on-year in May, compared with 8.38% in the previous month - the highest in nearly two years.
A nearly 5% fall in the rupee against the dollar this year has also made imports costlier. Core inflation, excluding volatile food and energy prices was estimated at 6.09%-6.1% in May by three economists, after the data release.
(With Agencies Inputs)