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May Retail Inflation At 4-Month High; April Industrial Output Up 4.9%

The annual consumer inflation rose to 4.87 per cent in May as compared to 4.58 per cent in April, government data showed on Tuesday.

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May Retail Inflation At 4-Month High; April Industrial Output Up 4.9%

Retail Inflation as forecast by analysts in a poll by Reuters, was likely to increase to 4.83% in May.


The annual consumer inflation rose to a four-month high of 4.87 per cent in May as compared to 4.58 per cent in April, provisional government data showed on Tuesday. The annual retail inflation in April 2017 stood at 2.99 per cent. Analysts in a poll by news agency Reuters had earlier forecast an increase in retail inflation to 4.83 per cent in May. May is the seventh month in a row in which retail inflation is higher than RBI's medium-term target of 4 per cent. Food inflation rose to 3.10 per cent last month as compared to 2.80 per cent in April.

"Pass through of fuel prices largely led to surge in inflation hile core inflation added to pricing pressures...Separately, food prices also showed some increase on account of food price hike, especially fruits and vegetables. However, they can be expected to stabilise on monsoon cues while core inflation can be expected to see further expansion if input costs remain on elevated levels," said Anis Chakravarty, Lead Economist and Partner, Deloitte India.

IndicesMay 2018 (Prov.)
RuralUrbanCombd.>
CPI (General)4.884.724.87
CFPI3.851.663.10
    
IndicesApril 2018 (Final)
RuralUrbanCombd.
CPI (General)4.674.424.58
CFPI3.631.292.80
    
IndicesMay 2017 (Final)
RuralUrbanCombd.
CPI (General)2.302.132.18
CFPI-0.60-1.85-1.05

In a separate data released by the government, industrial output rose to 4.9 per cent in April as compared to a five-month low of 4.4 per cent that it hit in March. In a poll conducted by Reuters economists had forecast 5.2 per cent growth in output compared with a 4.6 per cent year-over-year increase in March. As per the data released by the Central Statistics Office of the Ministry of Statistics and Programming, the manufacturing sector, which constitutes more than 77 per cent of the index of industrial production, grew 5.2 per cent; mining rose 5.1 per cent and electricity contributed 2.1 per cent as compared to April 2017.

Item GroupWeights (%)Contribution to IIP Growth
High Positive Contributors
Mining14.370.6126
Scientific instruments/ apparatus for drawing, calculating and measurement0.040.5126
Commercial Vehicles0.940.4686
Sugar0.760.4088
Cement- all types2.160.3836
High Negative Contributors
Jewellery of gold (studded with stones or not)0.44-0.4452
Copper bars, rods & wire rods0.64-0.2672
Telephones and mobile instruments0.19-0.1641
Readymade Garments, knitted0.23-0.1363
Air filters0.19-0.1345
 
Last week, the Reserve Bank of India (RBI) had marginally revised upwards its inflation projection for the fiscal 2019 on strong crude oil prices in the global market. The RBI had revised CPI inflation for 2018-19 to 4.8-4.9 per cent in first half of the fiscal and 4.7 per cent in the latter, including the impact of house rent allowance (HRA) for central government employees, with risks tilted to the upside. (With inputs from Agencies)


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