Retail inflation eased to 7.04 % in May, mainly on account of softening food prices, though it remained above the RBI’s upper tolerance level for the fifth consecutive month, government data showed on Monday.
The Consumer Price Index (CPI) based inflation was 7.79 % in April. In May 2021, the retail inflation stood at 6.3 %.
Inflation in the food basket was 7.97 % in May 2022, marginally lower than 8.31 % in the previous month, as per the data released by the National Statistical Office (NSO).
The Reserve Bank, which factors in the CPI in its monetary policy, had earlier this month raised the inflation forecast for the current financial year to 6.7 % from its previous estimate of 5.7 %.

As per the RBI’s projections, inflation in the first quarter of the fiscal is likely to be 7.5 % and at 7.4 % in the following three months. It is expected to decline to to 6.2 % and 5.8 % in the third and fourth quarters, respectively.

The government has tasked the RBI to ensure inflation remains at 4 % with margin of 2 % on either side.