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LATEST NEWS UPDATES | Retail inflation inches up to 5.76 per cent in May -KR Srivats

Retail inflation inches up to 5.76 per cent in May -KR Srivats

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published Published on Jun 14, 2016   modified Modified on Jun 14, 2016
-The Hindu Business Line

New Delhi: A sharp spike in food articles inflation has led to May retail inflation inching up to 5.76 percent, weakening prospects of any RBI repo rate cut in August.

This May 2016 print is higher than retail inflation of 5.01 percent in May last year and 5.47 percent in April this year.

Food articles inflation jumped to 7.55 percent in May 2016 from 6.40 percent in previous month.

The latest Consumer Price Index (CPI) based inflation print is also above the RBI expectation of 5 per cent for 2016-17. RBI expects food inflation to moderate in the coming months given the forecast of above normal monsoon this fiscal.

Food articles has 47 per cent weightage in the consumer prices inflation (CPI) index.

For the month under review, food articles inflation spike came essentially due to pulses (31.57% increase year-on-year), sugar (13.96%) and vegetables (10.77%).

While urban inflation for May 2016 came in at 4.89 per cent (4.41 percent in May 2015), rural inflation for the same month stood at 6.45 percent (5.52 percent).

Experts' take

Indranil Pan, Chief Economist, IDFC Bank, said CPI inflation was higher than street estimates, mainly on account of higher protein based inflation, vegetables and pulses.

"Overall, we see RBI to stay on a pause for the foreseeable future", he said referring to likely monetary policy stance of the Central bank.

Richa Gupta, Senior Economist, Deloitte in India, said that a jump in food inflation has led to increase in overall print for inflation.

"Going forward we are likely to see inflation remain at around current level and move down slightly towards the end of the year", she said.

The Hindu Business Line, 13 June, 2016, http://www.thehindubusinessline.com/economy/retail-inflation-inches-up-to-576-in-may/article8724447.ece?homepage=true


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