By Shubham Batra and Shivangi Acharya
NEW DELHI, June 12 (Reuters) – India’s retail inflation rose to 3.93% in May, driven by higher food and fuel costs, government data showed on Friday, as the outlook continued to remain clouded by price pressures stemming from the Middle East conflict.
May’s reading came in marginally below Reuters’ projection of 4.0%, and close to the central bank’s medium term inflation target.
The May print is the highest in the new series launched in January this year with a revised basket of goods and a new base.
The data comes after state-owned fuel retailers raised fuel prices four times in May alone, pushing up transport costs, while food inflation continued to accelerate from last year’s low levels at 4.78% in May, compared with April’s 4.20%.
Transport inflation jumped to 1.75% in May from a 0.01% decline in April, reflecting the pass-through from higher retail fuel prices.
Higher oil prices and expectations of a weak monsoon prompted the Reserve Bank of India to raise its inflation forecast for the current fiscal year to 5.1% from 4.6%, while also increasing risks to the rupee and current account deficit.
(Reporting by Shubham Batra and Shivangi Acharya in New Delhi; Editing by Nivedita Bhattacharjee)
