EXPERTS WEIGH IN ON INDIA'S MAY INFLATION DECLINE

Food inflation in India remained high at 8.69% in May, with cereal prices slightly increasing to 8.69% due to supply chain issues and climatic challenges

India’s annual retail inflation rate experienced a slight decline in May, dropping to 4.75% from 4.83% in April, according to government data released on Wednesday. This figure was also marginally below the 4.89% forecasted by a Reuters poll of 50 economists. Despite this overall easing, food prices continued to exert significant pressure, maintaining high levels that have persisted since late 2023.

Food inflation, a crucial component constituting nearly half of India’s consumer price index (CPI), increased by 8.69% year-on-year in May, a marginal change from the 8.70% rise recorded in April. This marks the seventh consecutive month that food prices have surged by over 8% annually, a trend that began in November 2023.

Breaking down the food inflation further, the data reveals substantial variations among different categories. The inflation rate for cereals rose slightly to 8.69% in May from 8.63% in April. The surge in cereal prices continues to reflect supply chain constraints and climatic challenges that have impacted production levels.