Tue. Mar 21st, 2023
Mounting Inflationary Pressure Squeezing The Pocket Size: Headline Inflation Drops MoM To 7.04% In May 2022, Still Higher Than Last Year’s Figures

The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) released the figures for India’s consumer price index based inflation on Monday.

The data shows a slight relief in inflation to 7.04 percent in May from 7.79 percent in April, but on the ground level, there are no signs that a consumer heaves a sigh of relief.

Purchasing sufficient cooking oil, vegetables, fruits, and spices for a month within a limited income persists to be a challenge for a home-maker.

High-level prices of fuel and food items, including vegetables, spices, and oils/fats, transportation, and communication pushed the inflation.

According to the data, on a year-on-year basis, the prices of vegetables soared 18.26% in May 2022, fruits became 13.26% expensive, while spices got 9.93% costlier.

There was a rise of 5.64% and 5.33% in the prices of milk and milk products and cereals and products, respectively.

The retail inflation in the rural setup stood at 7.01% in May 2022, up from 6.55% in May 2021, but lower than 8.38% in April 2022. For the urban area, the inflation in May 2022 was 7.08%, relatively the same as in April 2022, at 7.09% but higher than the previous year’s figure of 5.9%.

The combined inflation rate stood at 7.04%, a little lower than 7.79%, a near 8-year high, reported in April. Notably, for the straight five months, the inflation has been notched above the 6 percent upper band of the Reserve Bank of India’s (RBI) tolerance band.

The CPI-based inflation was 6.95 percent in March, 6.07 percent in February, and 6.01 percent in January.

The RBI has been asked by the government to control the retail inflation at 4 percent with a margin of  2 percent.

Inflation in the consumer food price index stood at 7.97 percent in May 2022, a slight dip from 8.31 percent in the previous month, as per the data released by the National Statistical Office (NSO).

State-wise Inflation:

State-wise, the May (YoY) retail inflation was the highest in Telangana at 9.45%, followed by Maharashtra (8.52%), Andhra Pradesh (8.49%), and West Bengal ( 8.27%).

In the capital, the year-on-year change in inflation for May was 5.57%.

Last week, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) unanimously decided to increase the repo rate by 50 basis points to 4.90% as a counter-effort to curb inflation.

As per the estimate by RBI, inflation in the first quarter of FY23 would be 7.5 percent and  7.4 percent in the following quarter.

By the third quarter, the inflation is estimated to decline to 6.2 percent and 5.8 percent in the fourth quarter.







By Harshita Sharma

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