New Delhi, June 12: India’s retail inflation rate has dropped below 4%, showcasing the economy’s resilience and the government’s commitment to stabilizing prices. This statement was made by the industry body PHDCCI on Friday.
In May, the annual retail inflation rate stood at 3.93%, which is below the Reserve Bank of India’s medium-term target of 4%. However, this figure is higher than April’s inflation rate of 3.48%.
Food inflation in May was recorded at 4.78%, up from 4.20% in April. This increase is attributed to rising prices of tomatoes, ginger, and dry fruits.
Rajeev Juneja, President of PHDCCI, stated, “Food prices fluctuate with the seasons, but overall inflation is under control, which helps maintain families’ purchasing power.”
PHDCCI further noted that ongoing improvements in the supply chain, stable energy prices, and a robust domestic economy are expected to aid efforts to keep inflation in check in the coming months.
According to Dipti Deshpande, Chief Economist at Crisil, the retail inflation rate for this fiscal year is projected to average 5.1%, an increase of 2% from the previous fiscal year. This rise is influenced by high fuel prices, currency depreciation, and the likelihood of reduced rainfall.
Rahul Agarwal, Chief Economist at ICRA, mentioned that although retail inflation rose from 3.5% in April to 3.9% in May, it remains below their estimate of 4.1%.
He added that the increase in inflation is primarily due to rising prices of food items, transportation, restaurant services, and personal care products. The last three categories have been impacted by hikes in petrol and diesel prices, commercial LPG cylinder rates, and increased customs duties on gold and silver.
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ABs
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