Economy

India’s May 2023 CPI Data Reveals Decrease in Retail Inflation and Its Implications.

The Indian government released the Consumer Price Index (CPI) data for May 2023, indicating a decrease in retail inflation to 4.25% from 4.70% in April. This marks the fourth consecutive month of declining retail inflation, providing relief to consumers and policymakers. However, retail inflation remains above the Reserve Bank of India’s (RBI) medium-term target of 4%. The RBI continues to monitor the situation and may implement further measures to curb inflationary pressures.

Decrease in Consumer Food Price Index (CFPI):

The Consumer Food Price Index (CFPI) declined from 3.84% in April to 2.91% in May. This decrease suggests lower food prices, especially for vegetables, easing the burden on consumers. The lower inflation rate for grains indicates improved affordability and access to essential food items. However, the prices of milk and related products remain high at 8.91%. Similarly, the inflation rate for grains is 12.65%, down from 13.67% in April, while the rate for spices rose to 17.90% from 17.43% and pulses increased to 6.56% from 5.28%.

Relief in Cooking Oil Prices:

The inflation rate for cooking oil and fats declined notably by 16.01%. The inflation rate for vegetables fell by 8.18%, while meat and fish prices dropped by 1.29%. Sugar prices increased slightly to 2.51%.

Repo Rate and Monetary Policy:

The decline in retail inflation provides some respite for those burdened by high interest rates. The RBI projects retail inflation of 5.1% for 2023-24 and expects inflation around 4.6% for April-June 2023. However, May figures indicate inflation is around 4%, suggesting possible further relief. The RBI’s Monetary Policy Committee will review the situation in August 2023 and may adjust the repo rate and reverse repo rate to curb inflationary pressures.

Alleviating the Burden of High Debt:

The decrease in retail inflation may provide relief for those with high debt. The RBI expects inflation to remain around 4.6% for April-June 2023. However, May figures indicate inflation is around 4%, suggesting possible further relief. The RBI’s Monetary Policy Committee will review the situation in August 2023 and may implement additional measures to curb inflationary pressures.

source: https://www.zeebiz.com/hindi/economy/cpi-inflation-retail-inflation-eases-further-to-4-25-pc-in-may-132115

https://www.abplive.com/business/cpi-inflation-slip-at-4-25-percent-in-may-2023-against-4-70-percent-in-april-2023-retail-inflation-data-2429953

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