Newsletter
India's retail inflation rose to 3.93% in May, up from 3.48% in April, moving closer to the RBI's 4% target.
What's getting costlier: food inflation increased to 4.78% in May. The biggest price jumps were seen in gold and silver jewellery, diamonds, platinum, and vegetables like tomatoes and ginger.
Meanwhile, potatoes, peas, cumin, and even cars and two-wheelers saw relatively smaller price increases.
Why the numbers look different: you can't directly compare this year's inflation with last year's because India changed how it measures inflation in January.
Think of it as updating the country's shopping basket to better reflect what people buy today. The new Consumer Price Index (CPI) uses 2024 as the base year.
Broader landscape: the conflict in West Asia has pushed up global crude oil prices. Since India imports most of its oil, higher prices mean the country needs to spend more dollars on imports, putting pressure on the rupee. The currency fell to a record low of 96.96 per US dollar on May 20, down nearly 5% since the conflict began. A weaker rupee makes imports, from crude oil to electronics and machinery, more expensive, adding to inflation. Transport inflation has already risen to 7.63%.
