India May inflation likely rose to four percent target
Economists expect India's annual consumer price inflation to hit the central bank's medium-term target of 4% for May following fifteen months of lower readings. The projected rise is driven by rebounding vegetable prices and higher fuel costs linked to geopolitical tensions in the Middle East.
India consumer inflation likely rose to 4% in May, hitting the central bank's medium-term target for the first time in 15 months. A Reuters poll of 38 economists indicates that surging vegetable prices and higher fuel costs ended a long period of benign price growth. The shift follows a 15-month period where inflation remained below the target level.
### Food and Fuel Costs End Benign Inflation Trend State-owned retailers raised fuel prices four times in May, driving transport inflation to an estimated 4.15% from -0.01% in April. This jump reflects the pass-through of higher energy costs linked to the conflict involving the United States, Israel, and Iran. Kanika Pasricha, chief economic adviser at Union Bank of India, said transport inflation likely contributed 36 basis points to the headline figure.
