India: Price pressures ease in May
June 12, 2017
In May, consumer prices rose 0.23% from the previous month, which followed April’s 0.15% rise. A moderate increase in prices for food and beverages was recorded, while fuel and light prices declined from the previous month. Inflation fell to a record low of 2.2% in May, after coming in at 3.0% in April. The result undershot market expectations of 2.4% and should give the Central Bank space to ease monetary conditions going forward. Inflation lies below the Central Bank’s medium term target of 4.0%.
The wholesale price index (WPI) in May declined 0.35% from the previous month, which followed April’s 0.18% fall. Prices fell across the board, including for fuel and power products. Wholesale price inflation fell from April’s 3.9% to 2.2%, a five-month low. The trend, however, pointed upward and annual average wholesale inflation rose to 3.4% from 2.2% in March.