Retail Inflation touches 21-month high in May

Consumer Price Index (CPI), or retail inflation for the month of May has increased to 5.76% as against 5.4% in April, its highest in 21 months.

The data showed that food price inflation rose to 7.55% in May with more increase in rural India at 7.75% and 7.24% in urban India.

Retail inflation in vegetables rose by 10.77%, in pulses and products by 31.57%, sugar and confectionary saw a rise of 13.96%.

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source: tradingeconomics.com

The data by Ministry of Statistics & Programme Implementation showed that inflation in fuel and light rose by 2.94% in May.

Concerns over India's rising retail inflation have been communicated by Raghuram Rajan, Governor, Reserve Bank of India (RBI) during his bi-monthly monetary policy review last month.

RBI said that it expects continuous rise in prices of food and fuel which are likely to accelerate inflation.

A Reuters poll suggested that higher food and fuel prices may push up inflation to over 5.5% in May.

India’s inflation grew by 5.4% in April, growing in both rural and urban region by 6.09% and 4.68% respectively.

CPI is important for India’s economy as the RBI tracks this data to set its monetary policy.