India: CPI rose modestly to 3.05% in May - ANZ

Analysts at ANZ note that India’s headline CPI rose modestly in May to 3.05% (y/y) from 2.99% in April led by higher food prices.

Key Quotes

“Demand-pull inflationary pressures remained weak, with core CPI moderating for the seventh straight month.”

“We expect headline inflation to inch up incrementally in the coming months, but remain below the Reserve Bank of India’s (RBI) medium-term target of 4%.”

“Overall, soft price pressures reaffirm our call for a cumulative 75bps of further cuts in the policy repo rate in the next six months.”