Consumer price inflation in the country accelerated for a second consecutive month in May touching a 21-month high of 5.76 per cent in May as food prices surged, official data released today showed.
Consumer price inflation was last higher than May 2016 level in August 2014 when it came in at 7.73 per cent. Food inflation in May rose to 7.55 per cent from 6.40 per cent in April.
Consumer prices increased by had increased at an annual rate of 5.47 per cent in April as per revised data.
Consumer price inflation for rural areas increased to 6.45 per cent in May 2016 from 5.52 per cent in May 2015. It was at 6.17 per cent in April 2016.
Urban inflation rate for consumer goods stood at 4.89 per cent in May 2016 against 4.41 per cent in May 2015. It was at 4.68 per cent in April 2016.
Food price inflation in rural areas increased to 7.75 per cent in May 2016 from 4.74 per cent in May 2016. It was at 6.66 per cent in April 2016.
The data could mar the prospects of the Reserve Bank of India's (RBI) reducing its benchmark interest rates as the consumer price inflation is a key metric for the central bank to decide interest rates.
The RBI has set a target for retail inflation at 5 per cent by March 2017, and has said that it could cut interest rates if prices nudge down. An uptick in inflation, however, will make it difficult for RBI governor Raghuram Rajan to cut rates at the next policy review on 9 August.