India Inflation May 2020

India: Price pressures ease in May

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.

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