New Delhi [India], In the latest assessment of India's Consumer Price Index (CPI) inflation for May 2024, experts from India Ratings & Research, PHD Chamber of Commerce and Industry and CRISIL have highlighted both the positive trends and long-term Shared insights. Challenges.
Headline CPI inflation for May 2024 declined marginally to 4.75 per cent from 4.83 per cent last month.
According to analysis by Sunil Kumar Sinha, senior director and principal economist, and Paras Jasrai, senior analyst at India Ratings & Research, the softening was attributed to factors such as a decline in core inflation and continued deflation in fuel and light prices. However, food inflation remained high at 8.7 percent, creating challenges especially for low-income households, which are heavily dependent on food grains.Sinha and Jasrai expressed concern over the prolonged elevated food inflation, which has remained above 8 percent for seven consecutive months. He highlighted the adverse impact on indicators such as consumer non-durable goods, whose output grew only 2.4 per cent year-on-year in April 2024. Additionally, adverse weather conditions, particularly heat waves in northern regions, and recently announced price increases. The problem of food inflation from dairy cooperatives is expected to worsen in the coming months.
Sinha and Jasrai said, “Core inflation declined to 3.1 percent in May 2024.This is the lowest print in the 2011-12 series and reflects three things a) the impact of tight monetary policy, b) weak consumer demand and c) relatively stable input costs Services inflation eased to 2.7 per cent in May 2024, the data showed. He further said, “Despite some moderation in core inflation, the fight on the inflation front is not over yet as food inflation remains high and if not controlled it could lead to wage inflation. -Could lead to price spiral. Inflation of 42.6 per cent of total items CPI basket still above 4 per cent."
India Ratings and Research estimates retail inflation to stand at 4.8 per cent in June 2024, with it expected to decline to below 4 per cent in Q2FY25 due to favorable base effects. However, uncertainties over food inflation due to climate-related events raise doubts about sustained inflation near the 4 percent target.Commenting on the CPI inflation announcement, Sanjeev Aggarwal, President, PHD Chamber of Commerce and Industry, appreciated the continued softening trend, with CPI inflation reaching 4.7 per cent in May 2024. He noted the continued decline in housing inflation and clothing and footwear inflation. Deficiency was described as a positive driver.
Sanjeev Aggarwal, President, PHD Chamber of Commerce and Industry, commented, “It is commendable that CPI inflation has shown a continued moderating trend to 4.7 per cent in May 2024. Housing inflation is continuing to moderate from 2.6 per cent to 2.5 per cent in April 2024 Clothing and footwear inflation is the main driver of the soft inflation trajectory from 2.8 per cent in April 2024 to 2.7 per cent in May 2024, however, inflation in food and beverages at 7.8 per cent in May 2024 still poses a challenge. I am doing.,
"The government's proactive measures to strengthen the supply chain are contributing to reducing inflation across many commodities. Going forward, inflation is expected to be moderated by an increase in kharif production due to an expected above normal south-west monsoon," he said. And it is expected to contribute to reducing it." However, Agarwal highlighted the persistent challenge posed by food and beverages inflation. He appreciated the government's proactive measures to strengthen supply chains, contributing to reducing inflation across a number of commodities.CRISIL Principal Economist Deepti Deshpande said in response to the Consumer Price Index (CPI) and Index of Industrial Production (IIP) data released today.
Deshpande commented, "The southwest monsoon has arrived on time, now its progress will impact how food inflation plays out over the next few months. Food inflation has remained above 8.5 per cent for the last four months. In May, Seasonal pressure kept it at 8.7 percent, unchanged from April, as we expect some moderation in the supporting base to help ease food inflation."Further relief will depend on the distribution of rainfall. For this financial year, we expect inflation to average 4.5 per cent - assuming soft food and benign non-food inflation," he said.
Deshpande stressed "stable industrial growth", as indicated by the Index of Industrial Production (IIP), which declined from 5.4 per cent in March to 5 per cent year-on-year in April.
"IIP growth of infrastructure and construction goods has strengthened, indicating continued support from government infrastructure spending and private real estate activity. Domestic demand may see some rebalancing this fiscal year," he said. Because rural demand is equal to urban consumption.The urban economy, which has been strong so far, may get a reprieve from tight credit conditions this financial year. “Retail credit growth has been slow in recent months,” he said. A recent survey by the Reserve Bank of India has shown a softening of consumer confidence in urban areas. The government's capital expenditure remains healthy, but is expected to be lower than the previous fiscal year due to the mandate of fiscal consolidation."
Headline CPI inflation for May 2024 declined marginally to 4.75 per cent from 4.83 per cent last month.
According to analysis by Sunil Kumar Sinha, senior director and principal economist, and Paras Jasrai, senior analyst at India Ratings & Research, the softening was attributed to factors such as a decline in core inflation and continued deflation in fuel and light prices. However, food inflation remained high at 8.7 percent, creating challenges especially for low-income households, which are heavily dependent on food grains.Sinha and Jasrai expressed concern over the prolonged elevated food inflation, which has remained above 8 percent for seven consecutive months. He highlighted the adverse impact on indicators such as consumer non-durable goods, whose output grew only 2.4 per cent year-on-year in April 2024. Additionally, adverse weather conditions, particularly heat waves in northern regions, and recently announced price increases. The problem of food inflation from dairy cooperatives is expected to worsen in the coming months.
Sinha and Jasrai said, “Core inflation declined to 3.1 percent in May 2024.This is the lowest print in the 2011-12 series and reflects three things a) the impact of tight monetary policy, b) weak consumer demand and c) relatively stable input costs Services inflation eased to 2.7 per cent in May 2024, the data showed. He further said, “Despite some moderation in core inflation, the fight on the inflation front is not over yet as food inflation remains high and if not controlled it could lead to wage inflation. -Could lead to price spiral. Inflation of 42.6 per cent of total items CPI basket still above 4 per cent."
India Ratings and Research estimates retail inflation to stand at 4.8 per cent in June 2024, with it expected to decline to below 4 per cent in Q2FY25 due to favorable base effects. However, uncertainties over food inflation due to climate-related events raise doubts about sustained inflation near the 4 percent target.Commenting on the CPI inflation announcement, Sanjeev Aggarwal, President, PHD Chamber of Commerce and Industry, appreciated the continued softening trend, with CPI inflation reaching 4.7 per cent in May 2024. He noted the continued decline in housing inflation and clothing and footwear inflation. Deficiency was described as a positive driver.
Sanjeev Aggarwal, President, PHD Chamber of Commerce and Industry, commented, “It is commendable that CPI inflation has shown a continued moderating trend to 4.7 per cent in May 2024. Housing inflation is continuing to moderate from 2.6 per cent to 2.5 per cent in April 2024 Clothing and footwear inflation is the main driver of the soft inflation trajectory from 2.8 per cent in April 2024 to 2.7 per cent in May 2024, however, inflation in food and beverages at 7.8 per cent in May 2024 still poses a challenge. I am doing.,
"The government's proactive measures to strengthen the supply chain are contributing to reducing inflation across many commodities. Going forward, inflation is expected to be moderated by an increase in kharif production due to an expected above normal south-west monsoon," he said. And it is expected to contribute to reducing it." However, Agarwal highlighted the persistent challenge posed by food and beverages inflation. He appreciated the government's proactive measures to strengthen supply chains, contributing to reducing inflation across a number of commodities.CRISIL Principal Economist Deepti Deshpande said in response to the Consumer Price Index (CPI) and Index of Industrial Production (IIP) data released today.
Deshpande commented, "The southwest monsoon has arrived on time, now its progress will impact how food inflation plays out over the next few months. Food inflation has remained above 8.5 per cent for the last four months. In May, Seasonal pressure kept it at 8.7 percent, unchanged from April, as we expect some moderation in the supporting base to help ease food inflation."Further relief will depend on the distribution of rainfall. For this financial year, we expect inflation to average 4.5 per cent - assuming soft food and benign non-food inflation," he said.
Deshpande stressed "stable industrial growth", as indicated by the Index of Industrial Production (IIP), which declined from 5.4 per cent in March to 5 per cent year-on-year in April.
"IIP growth of infrastructure and construction goods has strengthened, indicating continued support from government infrastructure spending and private real estate activity. Domestic demand may see some rebalancing this fiscal year," he said. Because rural demand is equal to urban consumption.The urban economy, which has been strong so far, may get a reprieve from tight credit conditions this financial year. “Retail credit growth has been slow in recent months,” he said. A recent survey by the Reserve Bank of India has shown a softening of consumer confidence in urban areas. The government's capital expenditure remains healthy, but is expected to be lower than the previous fiscal year due to the mandate of fiscal consolidation."
