Consumer Price Index-based inflation (CPI) for the month of May came in at 6.30 percent, much higher than April's 4.23 percent, and outside the Monetary Policy Committee's inflation targeting range of 4 (+/-2) percent for the first time since November 2020.
The higher inflation month-on-month was primarily on the back of a substantial hardening of food prices. Food inflation was 5.01 percent in May compared with 1.96 pe cent in April, official data showed.
Earlier in the day, data for Wholesale Price Index-based inflation was also released. WPI inflation touched 12.94 per cent in May, the highest on record, as the constant rise in the cost of fuel, including petrol, LPG and high speed diesel percolated down into the economy and a low base effect pushed up figures.
This wide gap between CPI and WPI inflation is expected and should not be a cause of concern, as per analysts. WPI has more weightage of non-food commodities and hence is impacted by a global rise in commodity prices. The weightage of food items is much more for CPI inflation.
(This is a developing story. More to follow)