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India's retail inflation for May moderated from the previous month and came in at 7.04 per cent. However, it remained above RBI's 6 per cent upper tolerance band for a fifth month in a row, data released on Monday showed.

The retail inflation stayed well above the RBI's tolerance limit due to high fuel and food prices amidst the war in Ukraine.

In April, the retail inflation was at 7.79 per cent.

Retail inflation tracked by the Consumer Price Index (CPI) measures the changes in prices from a retail market perspective.

RBI Governor Shaktikanta Das, at the recent monetary policy committee review deliberations, had categorically said that India's retail inflation is likely to stay above the tolerance level till the third quarter of FY23 before moderating below 6 per cent.

Das had also said that 75 per cent of the increase in inflation projections can be attributed to the food group.

For FY23, RBI sees overall inflation at 6.7 per cent, with 7.5 per cent in Q1, 7.4 per cent in Q2, 6.2 per cent in Q3, and 5.8 per cent in Q4, taking into consideration the normal monsoon and average crude oil basket price of $105 per barrel.

Notably, wholesale inflation in the country has been in double digits for over a year now.