India’s retail inflation eases to 4.25% in May

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| Photo Credit: V. Raju

India’s retail inflation eased further to 4.25% in May, from 4.7% in April, with price rise in food items faced by consumers moderating to 2.91%.

This is the third successive month that inflation has remained below the Reserve Bank of India’s upper tolerance limit of 6% after a prolonged streak above it.

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Urban consumers continued to face slightly higher inflation at 4.27% than their rural counterparts (4.17%), but food inflation was lower in urban areas, easing significantly to 2.43% from 3.7% a month earlier.

In comparison, rural food price rise moderation was less benign, cooling to 3.2% in May from 3.9% in April.

On a month-on-month basis, however, price levels continued to firm up, with the Consumer Index Price (CPI) rising 0.51% for the second successive month, while the Consumer Food Price Index (CFPI) ticked up 0.7%, compared to 0.6% in April.

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Industrial output grew 4.2% in April, rising from a five-month low in March, with electricity generation contracting for the second month in a row, even as manufacturing and mining grew about 5% in the month.

April’s industrial growth still reflected the second slowest uptick in six months, even as the National Statistical Office (NSO) revised the Index of Industrial Production (IIP) for March to show that production had grown 2.9% instead of the earlier estimate of 1.1%.