Indias May CPI Inflation At 12-Month Low Of 4.7%: Motilal Oswal

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Motilal Oswal Report

Headline Consumer Price Index inflation eased to a 12-month low of 4.7% YoY in May 2024 versus 4.8% in April 2024, mainly led by lower core inflation, which came in at an all-time low of 3.1%, and continued contraction in prices of fuel and light components (- 3.8% in May-24 versus -4% in Apr-24).

On the other hand, food inflation remained elevated at 8.7% during the month. The inflation number was largely in line with our expectation and Bloomberg consensus of 4.8%.

Food inflation came in at 8.7% YoY in May-24, same as in Apr-24. Details suggest that high food inflation was mainly driven by the prices of cereals and pulses, which were almost entirely offset by fall in prices of meat and fish, milk products and spices.

Prices of cereals rose to a five-month high of 8.7% in May-24 versus 8.6% in Apr-24. Prices of pulses went up 17.1% in May-24 versus 16.8% in Apr-24. At the same time, prices of fruits and vegetables (6% weight) also remained firm. The prices of vegetables rose 27.3% YoY, following a 27.8% YoY increase in Apr-24.

CPI, excluding veggies, came in at a 55-month low of 3.4% in May-24 versus 3.6% in Apr-24. On the other hand, inflation in milk products came in at a 35-month low of 2.6% in May-24 versus 3% in Apr-24. At the same time, inflation in spices came down to a 29-month low of 4.3% in May-24 from its peak of 23.2% in Aug-23 and 7.8% in Apr-24.

Standard core inflation (excluding food and energy) came down to 3.2% YoY in May-24 (versus 3.4% in Apr-24, lowest since January 2015)

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Motilal Oswal ECOscope CPI Inflation.pdf

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Also Read: India's Retail Inflation Eases To The Lowest In A Year At 4.75% In May

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