New Delhi: Wholesale price inflation accelerated to 7.55 percent in May from a year earlier, driven by double-digit rises in food and fuel prices, government data showed on Thursday.    

Analysts on average had expected an annual rise of 7.60 percent, a poll showed. Wholesale prices rose 7.23 percent in April.   

The annual reading for March was upwardly revised to 7.69 percent from 6.89 percent, the government said.

Potatoes turned costlier by 68.10 percent during May on annual basis. For April, the rate of price rise was 53.44 percent. Besides, pulses and wheat turned expensive by 16.61 percent and 6.81 percent respectively.
However, vegetables inflation was lower at 49.43 percent in May. In April, the rate of price rise was 61 percent.
Besides, eggs, meat and fish prices rose 17.89 percent during the month, slightly higher than 17.54 percent in April, the official data released today showed.
Inflation in milk was 11.90 percent, while rice and cereals turned costlier by 5.07 percent and 5.73 percent respectively.
Onion prices declined (-)7.23 percent in May. The rate of decline was (-)12.11 percent in April.
Non-food manufactured inflation showed some easing and was 5.02 percent in May. It was 5.12 percent in April.



"Since core inflation is still below 5 percent, I would expect RBI to cut rates by 25 basis points as that is the key number. There are cost pressures on inflation from rupee depreciation, excise duty increases, but I don't think that will spill over to the demand side because the demand side pressure are quite weak evident from the manufacturing inflation."   


- Standard & Poor's this week said that India could become the first of the so-called BRIC economies to lose its investment-grade status, less than two months after cutting its rating outlook for the country.     

- The Reserve Bank of India is widely expected to lower its main lending rate by 25 basis points (bps) to 7.75 percent on June 18 when it reviews its policy for the first time after cutting rates by a sharper-than-expected 50 bps in April.

- Falling global oil prices as well as declining core inflation and growth in India give the central bank room to adjust interest rates, a deputy governor said last week.         

- Industrial output rose just 0.1 percent in April, lower than expectations in a poll for a 1.7 percent increase. Output fell in March from a year earlier by 3.5 percent.     

- The economy expanded 5.3 percent in the March quarter, its slowest pace in nine years, on a combination of mounting global uncertainties, muddled policies, high inflation and steep interest rates at home.     

- Manufacturing sector kept up its steady expansion in May, driven by rising output, a business survey showed.     

- Car sales rose just 2.8 percent in May from a year earlier as a hike in excise duty on the vehicles hit demand.   


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