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Retail inflation spikes to 6.3% in May from 4.2% in April – Times of India

NEW DELHI: Retail inflation based on consumer price index (CPI) spiked to six-month high of 6.3 per cent in May, mainly due to rise in food prices, data released by government showed on Monday.
Inflation in the food basket was 5.01 per cent in May, significantly up from 1.96 per cent in the preceding month.
Prices in fuel and light category was elevated at 11.58 per cent during the month.
The inflation number stood at 4.23 per cent in April. The previous high in retail inflation was 6.93 per cent in November 2020.
The inflation figure breached the Reserve Bank of India’s (RBI’s) medium-term target of 4 per cent.
CPI inflation has breached the upper band of the inflation target about 10 times since the first meeting of the Monetary Policy Committee (MPC), which decides the key interest rate, in October 2016.
The steepest price rise was witnessed in the ‘oils and fat’ segment, which on an annual basis showed an increase of 30.84 per cent.
The May CPI data released by the National Statistical Office (NSO) further revealed that the rate of price rise in meat and fish, egg, fruits, and pulses and products stood at 9.03 per cent, 15.16 per cent, 11.98 per cent, and 9.39 per cent, respectively.
The Reserve Bank mainly factors in the retail inflation based on CPI while arriving at its monetary policy.
In its bi-monthly policy review meet held earlier this month, the central bank had left key interest rate unchanged for the six consecutive time.
The RBI’s monetary policy committee (MPC) has been tasked by the government to tame retail inflation based on consumer price index (CPI) at 4 per cent (+,-2 per cent).
In its previous policy meet, the central bank projected CPI inflation to be at 5.1 per cent during 2021-22 — 5.2 per cent in Q1; 5.4 per cent in Q2; 4.7 per cent in Q3; and 5.3 per cent in Q4 of 2021-22, with risks broadly balanced.
Earlier in the day, wholesale price-based inflation (WPI) also accelerated to a record high of 12.94 per cent in May, on rising prices of crude oil and manufactured goods.
This is the fifth straight month of uptick seen in WPI inflation. In April, the data hit double digit at 10.49 per cent.
(With inputs from agencies)