Experts warn of further pressure as India's retail inflation rises to 3.93 per cent in May
New Delhi, June 13
India's retail inflation rose to 3.93 per cent in May from 3.48 per cent in April, according to data released by the National Statistics Office on Friday with experts attributing the rise to broad-based pressures across food and non-food segments and warning of further increase in the coming months.
According to Dipti Deshpande, Principal Economist, Crisil Ltd, the impact of the West Asia conflict is starting to percolate household budgets.
"Crisil expects CPI inflation to rise to an average 5.1% this fiscal, from 2.0% last fiscal, with risks from higher fuel prices, currency depreciation, second-round effects and potentially weak rainfall."
Noting over 40 basis-point jump in retail inflation in May 2026 was largely anticipated, Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group said "both food and fuel inflation are likely to remain on an upward trajectory in the months ahead."
"Our assessment is that headline retail inflation could breach 6% at some point over the next six months. Even so, the Reserve Bank of India may refrain from adopting a decisively hawkish stance, provided core inflation remains anchored around 4% and inflationary pressures do not become broad-based."
Debopam Chaudhuri, Chief Economist at Piramal Group, noted that inflation is accelerating faster in urban areas compared to rural regions. "This could further erode purchasing power among urban households and weigh on discretionary consumption demand," she said.
For real estate sector, the industry remains stable as per Vivek Rathi, National Director- Research, Knight Frank India. Noting that housing inflation has continued to be moderate, Rathi noted "the sector has not become a significant source of price pressures in the economy."
"Going forward, the interplay between global commodity prices, and domestic inflation expectations will be critical in shaping the macroeconomic environment and the interest rate outlook," said Rathi.
— ANI
Reader Comments
The government keeps saying inflation is under control, but ask any homemaker, and they'll tell you the reality. The price of cooking oil has doubled in two years! And the West Asia conflict impact on budgets is real - I've stopped buying imported pulses and switched to local alternatives. The article rightly points out urban areas are hit harder. We need better policy to protect the common man.
Good that the real estate sector remains stable. At least housing inflation is moderate. But people forget that higher food inflation eventually leads to demands for wage hikes, which then affects all sectors. The RBI must balance growth with inflation control. I agree with the expert that if core inflation stays around 4%, they can avoid a hawkish stance. Let's hope the monsoon is good and keeps food prices in check. 🌾
#InflationHit - My salary increased by 8% this year, but inflation is eating it all up. Petrol was ₹96/litre last year, now it's ₹103. And vegetables that were ₹20/kg are now ₹40-50. The government should reduce GST on essential items and control fuel taxes. Otherwise, the common man will keep suffering while economists give fancy analysis in air-conditioned offices. 😤
As someone living in Bangalore, I can see inflation across the board. From auto rickshaw fares to restaurant bills - everything is up. The article mentions currency depreciation risks, which is worrying for imports. I've reduced my international travel plans because of higher costs. Hope the RBI and government take proactive measures before it spirals out of control like in some other countries.
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