retail inflation According to data released by the Ministry of Statistics and Program Implementation (MoSPI) on Monday, it declined slightly to 7.04 per cent in May. India’s headline inflation hit an eight-year high of 7.79 per cent in April. Experts believe that the sharp fall in fuel prices after the reduction in excise duty was instrumental in bringing down food prices last month. consumer price Index (CPI) inflation remained above the upper tolerance limit for May reserve Bank of India (RBI), for the fifth consecutive month.
Core CPI inflation fell to 6.2 per cent in May. In April it was at 7 per cent. Food inflation declined marginally to 7.97 per cent in May from 8.38 per cent in April. Fuel and light inflation eased to 9.54 per cent in May from 10.80 per cent in April. Similarly, inflation in clothing and footwear declined to 8.85 per cent in May from 9.85 per cent in April. On the other hand, the prices of vegetables remained high in the month of May. Inflation in vegetables rose to 18.26 per cent in May from 15.41 per cent in April.
“India’s consumer inflation eased to 7 per cent in May 2022, supported by government measures taken to curb domestic fuel and food prices. However, the inflation level is still above the RBI’s upper limit of 6 per cent. The narrowing gap between the Wholesale Price Index (WPI) and the Consumer Price Index (CPI) highlights the passing of increasing input costs from producers to consumers; As evidenced by the increased core inflation of 6.2 per cent; which is still high; With slight restraint,” said Vivek Rathi, director-research Knight Frank India.
Commenting on the easing of inflation in the near future, Rathi said, “In the coming months, domestic prices will continue to be under pressure due to global commodity and food prices. Thus, we are not expecting India’s inflation to cool down in the near term. Therefore, maintaining the strength of domestic demand will be important from a policy standpoint.
Reserve Bank of India to control the rising inflation in the country India In the June Monetary Policy Committee (MPC) meeting, the repo rate was increased by 50 basis points. RBI raised its inflation forecast for FY23 to 6.7 per cent. central bank hikes retail inflation forecast for April-June quarter to 7.5 per cent; 7.4 per cent for the July-September quarter; 6.2 per cent for the October-December quarter and 5.8 per cent for the January-March quarter of FY23.
Will food prices come down in the coming months?
“High-frequency mandi prices show some respite in the sequential gains so far. On the other hand, policy interventions to regulate exports have helped cereal prices, which, along with a modest MSP hike, should limit the possibility of a sharp jump in staple prices. Madhavi Arora, Principal Economist, Emkay Global Financial Services, said softening of vegetable oil prices globally, along with some reduction in import duty on some imported food products, would help moderate domestic edible oil prices.
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