India Inflation May 2021

India: Inflation comes in at highest level since November 2020 in May

Consumer prices rose 1.65% in May over the previous month, picking up from the 0.64% rise seen in April. May’s jump was the sharpest increase in prices since April 2020. The pick-up was broad-based, with greater price pressures recorded for food and beverages, fuel and light, and clothing and footwear.

Inflation increased to 6.3% in May, above April’s 4.2% and moving above the Central Bank’s target range of 4.0%–6.0%. The higher print could be linked in part to supply disruptions caused by renewed lockdowns. May’s reading was the highest inflation rate since November 2020. Annual average inflation was unchanged at April’s 5.9% in May.

Looking ahead, our panelists see price pressures gradually easing as the fiscal year wears on amid lessening supply constraints, with inflation expected to fall back within the Central Bank’s target range.

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