India Inflation May 2020


India: Price pressures ease in May

June 15, 2020

The National Statistical Office of India released only partial consumer price index (CPI) data for May, as it did previously for April, because of logistical issues related to the coronavirus pandemic. Nevertheless, consumer price pressures appeared to ease in May, according to available data, with both food and beverages, and fuel and light becoming cheaper month-on-month.

In terms of CPI inflation, Nomura research analysts Sonal Varma and Aurodeep Nandi created a “truncated CPI” accounting for 63.1% of the original index and measured that CPI inflation slowed to 6.9% in May versus 8.3% in April, reflecting an easing of food price pressures. The Reserve Bank of India’s (RBI) target range for CPI inflation is 2.0% to 6.0%.

Unlike for CPI, authorities were able to release complete wholesale price index (WPI) data for May, which showed prices falling 2.2% from March, the previous month for which data is available, after declining 1.5% in February. In annual terms, meanwhile, wholesale prices declined 3.2% in May, contrasting the 0.4% increase in March.

FocusEconomics Consensus Forecast panelists project consumer price inflation to average 3.7% in FY 2020, which ends in March 2021. The forecast is up 0.1 percentage points from last month’s forecast. In FY 2021, the panel projects consumer price inflation to average 4.1%. Meanwhile, our panel sees wholesale inflation averaging 1.5% in FY 2020, which is down 0.1 percentage points from last month’s report, and 3.1% in FY 2021.

Author:, Economist

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India Inflation Chart

India Inflation May 20 20

Note: Annual and monthly variation of wholesale price index (WPI) and annual variation of consumer price index (CPI) in %. Full CPI data is not available for April or May 2020. Full WPI data is not available for April 2020.
Source: Ministry of Commerce and Industry, and FocusEconomics calculations.

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