News ID: 216626
Published: 0546 GMT June 13, 2018

India's retail inflation accelerates to 4.87% in May

India's retail inflation accelerates to 4.87% in May

India's retail inflation rate accelerated to a four-month high of 4.87 percent in May, government data showed, driven by higher fuel prices and a depreciating rupee.

Analysts polled by Reuters had forecast May's annual increase in the consumer price index at 4.83 percent, compared with April's provisional 4.58 percent. The forecast for May ranged from 4.1 percent to 5.7 percent, Reuters reported.

India's retail inflation jumped further in May to a four-month high, primarily driven by a surge in energy prices, according to the Reuters poll, suggesting more policy tightening from the central bank is coming.

"Both headline and core inflation are in line with our expectations. Although both these measures may peak in the next reading, core may turn out to be sticky around 5 percent”, said a chief economist.

"Headline inflation could also remain around five percent by March 2019, and could potentially edge higher depending on MSP decision by the government. Accordingly, we expect the Monetary Policy Committee to hike policy rates by 25 bps by October."

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