India's CPI inflation down 12-mnth low of 4.75 %, food prices a worry

India's consumer price inIdex inflation in May 2024 eased to a 12-month low of 4.75 per cent but still remained significantly above the Reserve Bank of India's target, driven by food prices, which makes a rate cut by RBI in the coming months unlikely.

- NIVEDITA MUKHERJEE

"Year-on-year inflation rate based on all India Consumer Price Index (CPI) number is 4.75 per cent for the month of May 2024, the Ministry of Statistics and Programme Implementation said on Wednesday. "The CPI inflation is lowest for the month of May 2024 after May 2023. It is less than 6 per cent since September 2023," the MoSPI statement noted. The corresponding inflation rate for rural and urban is 5.28 per cent and 4.15 per cent respectively.

"The retail inflation edged down only marginally to 4.75 per cent in May 2024 from 4.83 per cent a month ago," says Sunil Kumar Sinha, Senior Director & Principal Economist at India Ratings and Research. "The moderation in the core inflation and a sustained deflation in fuel and light pushed the retail inflation down to a fivemonth low in April 2024.