India’s May retail inflation hits near 2-yr high on surging food prices


Reuters

Write Comment     |     E-Mail To a Friend     |     Facebook     |     Twitter     |     Print


India’s annual consumer price inflation accelerated to a near two-year high of 5.76 percent in May, driven by surging prices of food products such as pulses and sugar, which could dampen hopes of a rate cut at least during the next monetary policy review in August.

After leaving rates unchanged last week, Governor Raghuram Rajan said the Reserve Bank of India, which has targeted inflation at 5 percent by March 2017, was looking for room to reduce interest rates, but there were concerns over upward pressure on food and commodity prices.

Economists polled by Reuters had expected annual consumer prices, which the RBI closely tracks to set its interest rate policy, to be up by 5.52 percent in May, compared with an upwardly revised 5.47 percent in April.

Food inflation picked up to 7.55 percent in May from an upwardly revised 6.40 percent in the previous month, as prices of vegetables, sugar and pulses rose between 11 percent and 32 percent from a year earlier.

Retail inflation has more than halved since November 2013, thanks to a crash in global commodity prices as well as subdued rural demand. It had hit 7.03 percent in August 2014.

Analysts fear an increase in the cost of petrol and diesel by more than 5 percent since May 1, and in prices of foods such as sugar and milk in the last month, could further heat up prices.

"While there are some seasonal factors at play, structural mismatches are also evident in the rise in protein inflation," said A. Prasanna, economist at ICICI Securities Primary Dealership.

"We stick to our call of no more rate cuts in this financial year."

The government has also hiked taxes by 0.5 percentage point on services such as telecoms, travel and eating out from June 1.

Monday’s data comes on the heels of a 0.8 percent contraction in industrial production in April.

Asia’s third largest economy grew 7.9 percent in the quarter to March, outpacing China’s 6.7 percent growth, and is projected to expand by around 7.75 per cent in the current fiscal year that started on April 1.

New Delhi expects good rainfall between June and September, after two years of drought, to boost growth and tame prices of food items that account for nearly half of the consumer price index.

The monsoon, which delivers 70 percent of annual rainfall, is critical for India’s 263 million farmers and crops such as rice, cane, corn and cotton because nearly half of farmland lacks irrigation.

(Additional reporting by Rajesh Kumar Singh, Neha Dasgupta in NEW DELHI, Abhirup Roy in Mumbai; Editing by Douglas Busvine and Kevin Liffey)

Comments on this Article
Maxim, kukude Wed, June-15-2016, 7:58
Beef Prices are also up by 20 Rupees
Agree[0]
Jossey Saldanha, Nashville Wed, June-15-2016, 12:59
Acche Din is really Bull ...
Agree[1]
Write your Comments on this Article
Your Name
Native Place / Place of Residence
Your E-mail
Your Comment   You have characters left.
Security Validation
Enter the characters in the image above
    
Disclaimer: Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. Kemmannu.com will not be responsible for any defamatory message posted under this article.
Please note that under 66A of the IT Act, sending offensive or menacing messages through electronic communication service and sending false messages to cheat, mislead or deceive people or to cause annoyance to them is punishable. It is obligatory on kemmannu.com to provide the IP address and other details of senders of such comments, to the authority concerned upon request. Hence, sending offensive comments using kemmannu.com will be purely at your own risk, and in no way will Kemmannu.com be held responsible.
Similarly, Kemmannu.com reserves the right to edit / block / delete the messages without notice any content received from readers.




SANTHOSH VILLA’ Media Awareness Kannada short
View More

Save SwarnaSave Swarna
@ Rosario Grounds, Mangalore@ Rosario Grounds, Mangalore
Photo Album:

Ronald Andrade (67), laid to Rest.
Comments:

Obituary: Ronald Andrade (67), Kambla Thota, Kemmannu
Rozarich Gaanch September- 2018Rozarich Gaanch September- 2018
Flat For Sale in BrahmavarFlat For Sale in Brahmavar
Milarchi-Lara-September-2018Milarchi-Lara-September-2018
Welcome to Thonse Naturecure HospitalWelcome to Thonse Naturecure Hospital
Santhosh Villa short film by youth of Udupi Parish and ICYM.Santhosh Villa short film by youth of Udupi Parish and ICYM.
Crossland College, Year book 2017-18Crossland College, Year book 2017-18
Watch Eye to Eye by Avila D’souzaWatch Eye to Eye by Avila D’souza
Delite Caterers and Delite Event ManagementDelite Caterers and Delite Event Management
An appeal to Kemmannu Parishioners, Friends and Well Wishers:

[Comments]

An appeal to Kemmannu Parishioners, Friends and Well Wishers:<P> <Center>[Comments]</P> </Center>
Read online Uzvaad:<font color=red> Read online Uzvaad</font color=red>:
For all your travel needs contact Sequeira TouristFor all your travel needs contact Sequeira Tourist
Power Care Services, MoodubellePower Care Services, Moodubelle
Read Online RaknnoRead Online Raknno
Kemmannu Platinum Jubilee Souvenir – Amruth KaanikKemmannu Platinum Jubilee Souvenir – Amruth Kaanik
Udupi TodayUdupi Today
St. Alphonsa of India