Defying expectations of hardening, India’s CPI inflation moderated marginally, coming in at 4.75%YoY in May24 compared to 4.83% in Apr-24
Download ReportQuantEco Research || May-24 CPI inflation - A pleasant surprise
CPI inflation eased marginally in May-24 to defy expectations of a build-up. Food prices did not see a let-up in momentum, but ducked expectations of a stronger upside amidst intense heatwaves across the country in the month. Of the 299 items within the CPI basket, 47.5% recorded inflation within the target band in May-24, lower than 50.5% in Apr-24. Early price trends point to inflationary pressures in key food items such as onions, tomatoes and edible oils, so far in Jun-24. This implies that food inflation will continue to remain the Achilles heels for yet another month. Beyond Jun-24, food price pressures should see a moderation, as monsoon covers the entire country and conforms to IMD’s ‘Above normal’ expectations. We maintain our FY25 CPI inflation forecast of 4.5% vs. 5.4% in FY24.