Causes of current inflation
Prices of crude oil, petroleum, natural gas, minerals, food and non-food items, metals, chemicals and related products rose.
Compared to April 2022, the fuel and power sector grew by 2.25 per cent. When the products produced are re-examined by the sector, there is a situation where prices are rising in almost all categories. The main areas behind inflation are chemical-related products, textiles, food and machinery-electrical products.
At the same time, prices are declining in a few areas. In the field of base metals, computer products and optical products. Exports of such products were hampered by the threat of a global recession and the Russia-Ukraine conflict.
Inflation in the foodgrains industry rose to 176.1 per cent in May from 172.9 per cent in April 2022. Inflation based on the retail price index also remained high. However, the slight decline in food prices has kept the prices in the sector low. In April 2022, prices fell to 7.04 per cent from 7.79 per cent in May. However, the index remained above the RBI’s high for the fifth consecutive month.
Inflation based on the Consumer Price Index (CPI) stood at 7.79 per cent in April. It was 6.3 per cent in April last year. The Reserve Bank of India (RBI) has set the inflation rate at 6.7 per cent for the month. The previously intended level was 5.7 percent. The government has asked the Reserve Bank to keep inflation within 4 per cent. The decisions of the Fed meeting today and tomorrow have the potential to influence the policy making of other countries.