Rising fuel prices spur inflation in May

14 June, 2018, 11:14 | Author: Eric Barnett
  • Retail inflation rose to 4.87% for May industrial output grew by 4.9% in April

Based on Consumer Price Index (CPI), the retail inflation was at 4.58 per cent in the preceding month, April.

The manufacturing sector, which constitute more than 77 per cent of the index, recorded a growth of 5.2 per cent in April, up from 2.9 per cent in the year ago month.

In May previous year, the retail inflation was at a low of 2.18 per cent.

"This is 0.87 per cent points less than the 13.34 per cent recorded in April, and represents the sixteenth consecutive disinflation since January 2017". This is less than 15.47 percent reported in April, while the corresponding rural inflation rate in May 2018 is 14.53 percent compared to 14.95 percent recorded in April.

The composite food index, which measures the capacity of people to feed, rose by 13.45 per cent in during the month.

The rate of inflation was unchanged last month at 2.4% despite a surge in fuel costs, according to official figures.

India's retail inflation rate accelerated to a four-month high of 4.87 per cent in May, government data showed on Tuesday, driven by higher fuel prices and a depreciating rupee.


On month-on-month basis, the report noted that the urban index rose to 1.1 per cent in May from 0.85 per cent in April, while the rural index also rose to 1.08 per cent in May from the 0.82 per cent recorded in April.

It, however, measured the CPI at 14.79 per cent in the period under review, showing 0.41 per cent point lower from 15.20 per cent recorded in April. The rural inflation rate also dropped by 11.20% in May 2018, from 12.13% in the previous month of April 2018. This shows a reduction of 0.01% from 0.85% in April, on a month-on-month basis.

On State-by-State basis, the report said food inflation on an annual basis was highest in Yobe (15.86 per cent), followed by Kebbi (15.62 per cent) and Jigawa (15.56 per cent).

As per the data of the Central Statistics Office (CSO), food inflation rose to 3.10 per cent last month, as against 2.8 per cent in April.

In its biannual World Economic Outlook, the International Monetary Fund said economic activity in 2018-19 will be lifted by strong private consumption as well as the fading effects of the withdrawal of high-value currencies and implementation of GST.

Fruit prices grew at a faster pace of 12.33 per cent in May as against 9.65 per cent in April, while vegetables were costlier by 8.04 per cent (from 7.29 per cent month ago).

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