May retail inflation gallops to seven-month high of 3.05%

New Delhi: Retail inflation spiked to a seven-month high of 3.05 per cent in May, though remaining within RBI's comfort level, as kitchen items like vegetables, meat and fish turned dearer, government data showed Wednesday. The consumer price index (CPI) based retail inflation for April was revised marginally upwards to 2.99 per cent from the earlier estimate of 2.92 per cent, as per the data released by the Central Statistics Office (CSO) of the Ministry of Statistics and Programme Implementation.

Retail inflation stood at 4.87 per cent in May 2018. The previous high was in October 2018, when the retail inflation print came in at 3.38 per cent. Vegetables prices witnessed a sharp rise during May this year at 5.46 per cent as against 2.87 per cent in April 2019.

Prices of meat and fish went up by 8.12 per cent (from 7.55 per cent), while the inflation print for cereal and products rose to 1.24 per cent (from 1.17 per cent) in May this year. owever, prices of fruits continued to show a deflationary trend with an inflation rate of (-)5.17 per cent against (-)4.89 per cent in the preceding month. For fuel and light category, inflation stood at 2.48 per cent as against 2.56 per cent in April.

Inflation for the overall food basket, based on consumer food price index, increased to 1.83 per cent in May as against 1.10 per cent a month earlier, the data showed. Retail inflation is a crucial data point, keenly watched by the Reserve Bank while deciding its monetary policy.

Meanwhile, industrial output grew to a six-month high of 3.4 per cent in April mainly on account of improvement in mining and power generation, according to government data released Wednesday. The Index of Industrial Production (IIP) had expanded by 4.5 per cent in April 2018. The previous high in IIP growth was recorded at 8.4 per cent in October 2018.

The expansion in the mining sector was 5.1 per cent compared to 3.8 per cent in the year-ago month. Similarly, the growth in the power sector was 6 per cent in April as against 2.1 per cent in the corresponding month of the last fiscal. However, there was a slowdown in the manufacturing sector.

As per CSO data, manufacturing growth slipped to 2.8 per cent in April from 4.9 per cent in the corresponding period last year. Giving further details, the CSO data revealed that the growth in capital goods segment, barometer of investment activities, slowed sharply to 2.5 per cent from a high of 9.8 per cent in April 2018.

Similarly, slower growth was recorded in infrastructure/construction goods, consumer durables and consumer non-durables, segments in April 2019 on annual basis. However, the production of primary goods increased by 5.2 per cent in April this year as against 2.7 per cent year-on-year.

In terms of industries, 14 out of 23 industry groups in the manufacturing sector showed positive growth during April 2019 as compared to the corresponding month of the previous year. The industry group 'manufacture of wearing apparel' has shown the highest positive growth of 33.6 per cent followed by 22.6 per cent in 'Manufacture of wood and products of wood and cork, except furniture

On the other hand, the industry group 'manufacture of paper and paper products' showed the highest negative growth of (-) 12.3 per cent followed by (-) 9.6 per cent in 'manufacture of fabricated metal products.