The government on Monday informed that retail inflation in India eased to 4.25 per cent in May mainly due to softening prices of food and fuel articles. Inflation based on the Consumer Price Index (CPI) stood at 4.7 per cent in April and 7.04 per cent in May 2022.
This is the fourth month in a row that retail inflation has declined and the third month in a row that consumer price index (CPI) based inflation has remained in the RBI’s comfort zone of below 6 per cent. At 4.25 per cent, retail inflation is the lowest since April 2021 when it was 4.23 per cent.
The government has tasked the central bank to ensure that retail inflation remains at 4 per cent with a margin of 2 per cent on either side. Inflation for the food basket stood at 2.91 per cent in May, lower than 3.84 per cent in April. The food basket accounts for about half of the CPI.
Inflation in fuel and power came down to 4.64 per cent from 5.52 per cent in April. Last week, the Reserve Bank kept policy rates unchanged at 6.5 per cent and projected retail inflation for the current fiscal to average at 5.1 per cent, as against inflation pegged at 4.6 per cent in the June quarter.
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