New Delhi, June 14 | Exponential rise in food prices sequentially rocketed India’s retail inflation in May as the Consumer Price Index (CPI) increased to over 6 per cent.
According to the data furnished by the National Statistical Office (NSO), the CPI rose to 6.30 per cent last month from 4.23 per cent in April.
Region wise, the CPI Urban rose to 6.04 per cent last month from 4.71 per cent in April.
Similarly, the CPI Rural climbed to 6.48 per cent in May from 3.75 per cent in April.
As per the NSO data, Consumer Food Price Index increased to 5.01 per cent last month from 1.96 per cent in April.
The CFPI readings measure the changes in retail prices of food products.
In terms of CPI YoY inflation rate, pulses and products’ prices jumped by 9.39 per cent in May 2021.
Meat and fish prices rose 9.03 per cent, eggs became dearer by 15.16 per cent and the overall price of food and beverages category was up 5.24 per cent.
However, vegetable prices declined by 1.92 per cent.
Besides, the official data, the inflation rate for fuel and light was at 11.58 per cent.
“Some categories in the food basket such as meat and fish, edible oil, fruits and pulses continue to show high inflation, both on a YOY and sequential basis, reflecting structural supply bottlenecks that might have got further aggravated by the fresh disruption brought in by the second Covid wave,” Acuite Ratings and Research’s Chief Analytical Officer Suman Chowdhury said.
“Importantly, the core inflation is also estimated to be higher with the additional push from increased retail fuel prices as well as the pass through of increased manufacturing costs, reflected in the WPI data.”
India Ratings and Research’s Principal Economist Sunil Kumar Sinha said: “Although it is still too early to believe that retail inflation will remain in excess of 6 on a sustained basis given the high base of last year, Ind-Ra believes a rising wholesale inflation, which is gradually finding a reflection in the retail inflation as well, is going to make things difficult for the RBI.”
“However, given the growth inflation dynamics, Ind-Ra believes the RBI will not be in a hurry to tinker with either the policy rate or its accommodative policy stance.”
Emkay Global’s Lead Economist Madhavi Arora said: “In conjunction with a low base, sequential acceleration across food and core segments drove inflation higher.”
“As seen in WPI inflation, CPI food inflation was up sharp 5 per cent partly led by seasonal factors while fuel inflation crossed double digits amid transmission of higher international prices to retail level. Core inflation also saw broad-based increase, making the YoY print high at 6.6 per cent.”