Retail inflation shoots up to 4.87 per cent in May

Galtero Lara
Junio 14, 2018

Retail inflation rose to a four-month high at 4.87% in May while India's factory output recovered only marginally to grow at 4.9% in April, days after the Reserve Bank of India (RBI) raised interest rates for the first time in four years citing inflation concerns.

On month-on-month basis, the food sub-index increased by 1.33 percent in May 2018, up by 0.42 percent points from 0.91 percent recorded in April.

In May past year, the retail inflation was at a low of 2.18 per cent.

Besides, the "All items less farm produce" or Core inflation, excluding prices of volatile agricultural produce, stood at 10.7 per cent in May 2018, down marginally by 0.2 per cent from the 10.9 per cent rate recorded in April.

The manufacturing sector, which constitute more than 77 per cent of the index, recorded a growth of 5.2 per cent in April, up from 2.9 per cent in the year ago month.

Based on the Consumer Price Index (CPI), the inflation was at 4.58% in the preceding month.

On a month-on-month basis, the bureau said the Headline Index increased by 1.09 per cent in May, up by 0.26 per cent points from the rate recorded in April.

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So far in 2018, retail prices of petrol have climbed 9.2 percent and diesel by 13.7 percent in the capital, Delhi.

Inflation rate reduces by 0.87% from April. This rise in the index was caused by increases in prices of Potatoes, yam and other tubers, Vegetables, Fish, Bread and cereals, Fruits and Meat.

On month-on-month basis, the food sub-index increased by 1.33 per cent in May 2018, up by 0.42 per cent points from 0.91 per cent recorded in April. The rural inflation rate also dropped by 11.20% in May 2018, from 12.13% in the previous month of April 2018.

On Tuesday, the ONS said wage growth slowed to 2.8% in the three months to April from 2.9%.

The corresponding 12-month year-on-year rural inflation rate in the period under review is 14.53% compared to 14.95% in April 2018 while the corresponding urban index is 15.10% which is less than 15.47% reported in April, 2018. A Reuters poll of economists which predicted the inflation to come at 4.83 per cent, also suggested more policy tightening from RBI in the coming months.

In addition, it stated that the rural inflation also eased 11.20 per cent in May from 12.13 per cent in April.

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