Govt releases part of CPI data; food inflation up 9.28% in May

NEW DELHI:The government withheld the headline retail inflation figures for May, as it did for the prior month as well due to the lack of data owing to lockdown restrictions.
However, retail food inflation saw a year-on-year rise to 9.28%, data released by the ministry of statistics and programme implementation (MOSPI) on Friday showed. While this figure stood at 8.36% for urban areas, food inflation was at 9.69% in rural areas.

As per the previous month’s release, price movement data from the National Statistical Office (NSO) found that food inflation stood at 8.76% in March while headline retail inflation was recorded at 5.84% for that month.

According to Aditi Nayar, principal economist at ICRA, the double-digit inflation levels for pulses, meat and fish, and oils and fats in May were a cause of concern, while prices of other sub-groups moderated month-on-month.

“In particular, vegetable prices corrected appreciably in May 2020 relative to the previous month, suggesting an easing of supply disruptions, amid low demand from the restaurants and hotels segment,” Nayar said.

Data for certain groups and sub-groups in the basket of items of the consumer price and consumer food price indices (CPI and CPFI) were unavailable, the release said. These included ‘prepared meals, snacks, sweets etc.’ and ‘clothing and footwear’.

Continuing the trend from the previous month, the NSO released only limited data where it had received enough inputs to be able to draw inferences. Whereas it collects price data from selected 1114 urban markets and selected 1181 villages through personal visits by field staff, it only received data from 987 urban markets and 836 villages, for commodities which were available and being transacted during the month of May.

“It is, however, observed that transactions were largely focused on essential purchases,” the release said.

Nayar expected higher inflation in June on account of rising crude oil prices, even as they were below year-ago levels.

“The ongoing supply cuts and a gradual recovery in global demand following the easing of lockdowns, have driven up the prices of crude oil, even as they remain considerably lower than the year ago level,” she said, adding, “The sequential rise in prices has transmitted into the retail selling price of petrol and diesel by the OMCs in the current month, which will push up inflationary pressures in June 2020.”