New Delhi: Retail inflation continued to decline in May due to a marginal decline in food prices and touched a one-year low of 4.75 per cent, according to the government, which is within the Reserve Bank's comfort zone of below 6 per cent. doing. The data was released on Wednesday.
Consumer Price Index (CPI) based retail inflation – on a declining trend since January – stood at 4.83 per cent in April 2024 and 4.31 per cent in May 2023 (previous low).
According to data released by the National Statistical Office (NSO), inflation in the food basket stood at 8.69 per cent in May, slightly lower than 8.70 per cent in April.
A gradual decline in headline inflation is seen from January 2024, albeit in a narrow range from 5.1 per cent in February to 4.8 per cent in April 2024.According to data released by NSO, all-India inflation based on CPI in May 2024 is the lowest since the year-ago month when it stood at 4.31 per cent. From September 2023 it is less than 6 percent.
Inflation in vegetables during May was higher than in the previous month, while in case of fruits it was lower.
The government has entrusted the Reserve Bank with the task of ensuring that CPI inflation remains at 4 per cent with a margin of 2 per cent on either side.
Earlier this month, the RBI had projected CPI inflation at 4.5 per cent for 2024-25, 4.9 per cent in Q1, 3.8 per cent in Q2, 4.6 per cent in Q3 and 4.5 per cent in Q4.
The central bank mainly takes into account retail inflation while deciding its bi-monthly monetary policy.Commenting on the CPI data, ICRA Chief Economist Aditi Nair said headline inflation unexpectedly fell to a 12-month low of 4.75 per cent in May 2024 as all sub-groups except fuel and light saw either softening or Went or remained. Unchanged from last month.
ICRA estimates that food and beverage inflation will moderate to some extent in June 2024 compared to May 2024, while it will remain above 7 percent for the month.
“This will help keep the headline CPI inflation print below 5 per cent in June 2024. Thereafter, a favorable base is expected to lead to a temporary sharp decline in CPI inflation to 2.5-3.5 per cent in July 2024 and August. 2024,” Nair said.NSO data showed that retail inflation was higher at 5.28 per cent in rural areas compared to 4.15 per cent in urban areas.
State-wise, inflation in Andhra Pradesh, Assam, Bihar, Chhattisgarh, Haryana, Karnataka, Kerala, Odisha, Rajasthan, Tamil Nadu, Telangana and Uttar Pradesh was higher than the national level of 4.75 per cent.
Odisha saw the highest inflation at 6.25 percent, while Delhi recorded the lowest at 1.99 percent.
Price data is collected by NSO from selected 1,114 urban markets and 1,181 villages covering all States/UTs on a weekly roster.
During May, NSO collected prices from 100 villages and 98.5 per cent of urban markets.
Consumer Price Index (CPI) based retail inflation – on a declining trend since January – stood at 4.83 per cent in April 2024 and 4.31 per cent in May 2023 (previous low).
According to data released by the National Statistical Office (NSO), inflation in the food basket stood at 8.69 per cent in May, slightly lower than 8.70 per cent in April.
A gradual decline in headline inflation is seen from January 2024, albeit in a narrow range from 5.1 per cent in February to 4.8 per cent in April 2024.According to data released by NSO, all-India inflation based on CPI in May 2024 is the lowest since the year-ago month when it stood at 4.31 per cent. From September 2023 it is less than 6 percent.
Inflation in vegetables during May was higher than in the previous month, while in case of fruits it was lower.
The government has entrusted the Reserve Bank with the task of ensuring that CPI inflation remains at 4 per cent with a margin of 2 per cent on either side.
Earlier this month, the RBI had projected CPI inflation at 4.5 per cent for 2024-25, 4.9 per cent in Q1, 3.8 per cent in Q2, 4.6 per cent in Q3 and 4.5 per cent in Q4.
The central bank mainly takes into account retail inflation while deciding its bi-monthly monetary policy.Commenting on the CPI data, ICRA Chief Economist Aditi Nair said headline inflation unexpectedly fell to a 12-month low of 4.75 per cent in May 2024 as all sub-groups except fuel and light saw either softening or Went or remained. Unchanged from last month.
ICRA estimates that food and beverage inflation will moderate to some extent in June 2024 compared to May 2024, while it will remain above 7 percent for the month.
“This will help keep the headline CPI inflation print below 5 per cent in June 2024. Thereafter, a favorable base is expected to lead to a temporary sharp decline in CPI inflation to 2.5-3.5 per cent in July 2024 and August. 2024,” Nair said.NSO data showed that retail inflation was higher at 5.28 per cent in rural areas compared to 4.15 per cent in urban areas.
State-wise, inflation in Andhra Pradesh, Assam, Bihar, Chhattisgarh, Haryana, Karnataka, Kerala, Odisha, Rajasthan, Tamil Nadu, Telangana and Uttar Pradesh was higher than the national level of 4.75 per cent.
Odisha saw the highest inflation at 6.25 percent, while Delhi recorded the lowest at 1.99 percent.
Price data is collected by NSO from selected 1,114 urban markets and 1,181 villages covering all States/UTs on a weekly roster.
During May, NSO collected prices from 100 villages and 98.5 per cent of urban markets.
