India’s retail inflation rose to 3.93% in May, up from 3.48% in the preceding month, due to rising food and fuel costs.

The new data on prices raised fresh concerns over the inflation outlook amid the US-Iran war and possibility of a weak monsoon.

Though still within the Reserve Bank of India’s target of 4%, inflation is expected to further rise if the external geopolitical hostilities persist. The May increase came after a rise in petrol and diesel prices during the month, which pushed transport inflation to 1.75% from a contraction of 0.01% in April.

Consumer Price Index-based inflation in the food basket was 4.78% in May, up from 4.2% in April, according to the National Statistical Office (NSO) data.

Last week, the RBI raised its inflation forecast for the current fiscal to 5.1% from 4.6%, citing concerns over second-round effects from supply-driven inflationary pressures.