Mumbai: The retail inflation in the country softened to 7.04% in May. But, the rate is still higher than the upper tolerance limit set by the Reserve Bank of India (RBI). The inflation rate is above the upper tolerance limit for the fifth month in a row.
The consumer price-based inflation (CPI) rate has reached an eight-year high in April. In April the inflation rate was at 7.79%. The previous high was recorded at 8.33% in May 2014. In March this year, the rate was at 6.95%. Food inflation, which accounts for nearly half the CPI basket, was 7.97% in May. It was marginally lower than 8.31% in April.
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RBI had earlier this month raised the inflation forecast for the current financial year to 6.7% from its previous estimate of 5.7%. The government has mandated the central bank to keep retail inflation at 4%, with a tolerance level of plus or minus 2% of that rate, which is between 2 and 6 per cent.
Meanwhile, the data released by the Union government revealed that the wholesale price-based (WPI Inflation) inflation has reached at 15.88% in May. This is the highest level in last 10 years. The rise in the prices of fuel, metal, chemicals, and food articles are the four main reasons for the surge.
The WPI-based inflation stood at 15.08% in April and 14.55% in the previous month. In May 2021, the WPI-based inflation stood at 13.11%, as per data released by the Ministry of Commerce & Industry. The month-over-month change in the WPI index for the month of May 2022 stood at 1.38% as compared to April 2022.
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