India Inflation Accelerates to 3.93%, Stays Below RBI Target

India's retail inflation accelerated to 3.93% in May 2024, a slight increase from 4.83% in April, according to data released by the National Statistical Office (NSO) on June 12, 2024. This figure, however, remains within the Reserve Bank of India's (RBI) target band of 2% to 6% and below the central bank's medium-term objective of 4%. The acceleration was primarily driven by a significant rise in food inflation, which jumped to 8.69% in May from 8.70% in April, with vegetables and pulses showing notable price increases. Fuel and light inflation also contributed, rising to 3.87% in May compared to 4.01% in April, reflecting global energy market dynamics. Core inflation, excluding food and fuel, eased to 3.25% in May from 3.37% in April, indicating moderating price pressures in other sectors. The RBI has maintained its policy repo rate at 6.50% since February 2023, aiming to balance growth and inflation control. The NSO data also indicated that the Consumer Food Price Index (CFPI) for rural areas stood at 8.69% and for urban areas at 8.69% in May.