Retail inflation up at 5.01 % in May

Retail inflation edged up to 5.01 per cent in May on costlier pulses even as prices of fruits and vegetables eased during the month.

The Consumer Price Index-based inflation was at 4.87 per cent in April 2015. The retail inflation was 8.33 per cent in May 2014.

Prices of pulses rose by 16.62 per cent in May 2015 over the same month last year, according to the data released by the Ministry of Statistics & Programme Implementation on Friday.

Domestic pulses production fell by nearly two million tonnes in 2014-15 crop year due to unfavourable weather conditions such as untimely rains.

The Reserve Bank, which tracks retail inflation as a benchmark for its monetary policy, said earlier this month that price rise was still a worry for the central bank. RBI expects inflation to rise to 6 per cent by January 2016.

The overall food inflation fell to 4.8 per cent during the month, from 5.11 per cent in April 2015. The food inflation was at 8.89 per cent in May 2014.

The inflation for fruit and vegetables was 3.84 per cent and 4.64 per cent, respectively, in May 2015.

Among others, milk and its products were costlier by 7.43 per cent in May 2015 over the same month last year.

Prices of protein-rich items such as ‘meat and fish’ rose by 5.43 per cent, while spices turned costlier by 8.82 per cent in the month.

Prices of prepared snacks and meals rose by 7.89 per cent, clothing and footwear category by 6.12 per cent, housing by 4.64 per cent and fuel and light by 5.96 per cent.

Of the other categories, oils and fats prices rose by 1.95 per cent, cereals and products by 1.98 per cent, while that of egg declined by 0.78 per cent in May 2015.

Commenting on the May inflation data, ratings agency ICRA said, “The marginal uptick in CPI inflation for May 2015 is in line with our expectations, given the considerable upward revision in fuel prices during that month.

“Following the rate cut in the June 2015 RBI policy review, we expect an extended pause until the extent of the monsoon shortfall and its impact on food inflation become clear.”