May Retail Inflation Moderates to 7.04% but Still above RBI's Tolerance Band
India's retail inflation for May moderated from the previous month and came in at 7.04%. However, it remained above the Rserve Bank of India's (RBI's) 6% upper tolerance band for a fifth month in a row, data released on Monday showed.
The retail inflation stayed well above the RBI's tolerance limit due to high fuel and food prices amidst the war in Ukraine.
In April, the retail inflation was at 7.79%.
Retail inflation tracked by the Consumer Price Index (CPI) measures the changes in prices from a retail market perspective.
RBI governor Shaktikanta Das, at the recent monetary policy committee review deliberations, had categorically said that India's retail inflation is likely to stay above the tolerance level till the third quarter of FY22-23 before moderating below 6%.
Das had also said that 75% of the increase in inflation projections can be attributed to the food group.
For FY22-23, RBI sees overall inflation at 6.7%, with 7.5% in Q1, 7.4% in Q2, 6.2% in Q3, and 5.8% in Q4, taking into consideration the normal monsoon and average crude oil basket price of Us $105 per barrel.
Notably, wholesale inflation in the country has been in double digits for over a year now.
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