According to data released by the Ministry of Statistics and Programme Implementation, India’s headline retail inflation rate eased to 7.04 percent in May from April’s near-eight-year high of 7.79 percent thanks to a favourable base effect. The fall in inflation in May is unlikely to do much to slow down the Reserve Bank of India’s (RBI) rate hike cycle. The Consumer Price Index (CPI) based inflation was 7.79 per cent in April. In May 2021, the retail inflation stood at 6.3 per cent.
- Meanwhile, a rise in price across all items from fuel to vegetables and cooking oil pushed WPI or Wholesale Price Inflation to a record high of 15.08 per cent in April and retail inflation to a near eight-year high of 7.79 per cent.
- Retail inflation tracked by the Consumer Price Index (CPI) measures changes in prices from a retail buyer’s perspective.
- The Reserve Bank, which factors in the CPI in its monetary policy, had earlier this month raised the inflation forecast for the current financial year to 6.7 per cent from its previous estimate of 5.7 per cent.