Sector Trends     10-Jun-24
CPI Inflation Projections: Expects to increase to 5.0% in May 2024
RBI projects CPI inflation for 2024-25 at 4.5%

Central Statistical Office (CSO), operating under Ministry of Statistics and Programme Implementation (MOSPI), is scheduled to release the data on General Consumer Price Indices (CPI) with the base year 2012=100 for the month of May 2024 on 12 June 2024.

Capital Market has conducted a poll amongst economists across leading banks, rating agencies, financial advisories and brokerages for May 2024 CPI inflation projections. The results of the poll as indicated by the median of CPI inflation forecasts from economists, shows that CPI inflation would increase to 5.0% in May 2024 from 4.8% reading in April 2024.

The economists in the poll have projected the CPI inflation in the narrow range of 4.9% to 5.1% for May 2024. The median of various CPI inflation forecast received from economists stood at 5.0%, while the average also stood at 5.0% for May 2024.

CPI Inflation: April 2024

The all-India general CPI inflation declined to 4.83% in April 2024 (new base 2012=100), compared with 4.85% in January 2024. The corresponding provisional inflation rate for rural area was 5.43% and urban area 4.11% in April 2024 as against 5.51% and 4.14% in January 2024. The core CPI inflation was steady at 3.25% in April 2024 compared with 3.25% in January 2024.

Among the CPI components, inflation of food and beverages increased to 7.87% in April 2024 from 7.74% in January 2024. Within the food items, the inflation for oils and fats increased to (-) 9.43%, meat and fish 8.17%, fruits 5.22% and cereals and products 8.63%. However, the inflation for spices eased to 7.75%, milk and products 2.97%, pulses and products 16.84%, egg 7.08% and sugar and confectionery 5.94%. Further, the inflation for vegetables declined to 27.80%, prepared meals, snacks, sweets etc. 3.46% and non-alcoholic beverages 2.60% in April 2024. The inflation for housing declined to 2.68%, while that for miscellaneous items rose to 3.54% in April 2024.

Within the miscellaneous items, the inflation for personal care and effects increased to 7.45%, household goods and services 2.69% and health 4.27%, while the inflation for transport and communication declined to 1.09%, education 4.20% and recreation and amusement 2.64% in April 2024.

The inflation for clothing and footwear declined to 2.85%, while the CPI inflation of fuel and light eased to (-) 4.24% in April 2024.

FAO Food Price Index: May 2024

The benchmark for world food commodity prices increased for the third consecutive month in May, as higher prices of cereals and dairy products outweighed decreases in quotations for sugar and vegetable oils, as per the Food and Agriculture Organization of the United Nations (FAO).

The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 120.4 points in May, up 0.9% from its revised April level, while it remained down 3.4% from its level a year ago and 24.9% below its March 2022 peak.

The FAO Cereal Price Index rose by 6.3% from April, powered higher by rising global wheat export prices, reflecting growing concerns about unfavourable crop conditions curbing yields for the 2024 harvests in major producing areas including parts of Northern America, Europe and the Black Sea region. Maize export prices also increased in May, pushed up by production concerns in both Argentina, due to the Spiroplasma disease (also known as corn stunt disease), and Brazil, due to unfavourable weather, as well as spillover effects from the wheat markets and limited selling activity in Ukraine. The FAO All-Rice Price Index rose by 1.3% in May.

The FAO Dairy Price Index increased by 1.8% from April, underpinned by increased demand from the retail and food services sectors ahead of the summer holidays as well as market expectations that milk production in Western Europe may fall below historical levels. Renewed import demand for spot supplies from some countries in the Near East and North Africa also lifted dairy prices.

The FAO Sugar Price Index, meanwhile, decreased by 7.5% from April, mainly driven by pressure from the good start of the new harvest season in Brazil. Lower international crude oil prices also exerted downward pressure on sugar prices, by lowering demand.

The FAO Vegetable Oil Price Index declined by 2.4% from April. Lower palm oil quotations due to seasonal output increases and ongoing weak global demand more than offset higher prices of soy oil, due to increasing demand from the biofuel sector, and firmer prices of rapeseed and sunflower oils due mainly to diminishing export availabilities in the Black Sea region.

The FAO Meat Price Index decreased marginally, by 0.2%, as international prices of poultry and bovine meats fell while those of pig and ovine meats increased.


The CPI inflation declined in April 2024. The core inflation was steady in April 2024. The Reserve Bank of India projects CPI inflation for 2024-25 at 4.5% with Q1 CPI inflation at 4.9%, Q2 at 3.8%, Q3 at 4.6% and Q4 at 4.5%. As per the RBI, rising incidence of adverse climate events impart considerable uncertainty to the food inflation trajectory. Market arrivals of key rabi crops, particularly pulses and vegetables, need to be closely monitored in view of the recent sharp upturn in prices. Normal monsoon, however, could lead to softening of food inflation pressures over the course of the year. Pressure from input costs have started to edge up and early results from enterprises surveyed by the Reserve Bank expect selling prices to remain firm. Volatility in crude oil prices and financial markets along with firming up of non-energy commodity prices pose upside risks to inflation.

Economists Projections for CPI Inflation (%) - May 2024
Organization Projection (%)
Bank of Baroda 4.9
Care Ratings 5.1
HDFC Bank 5.1
ICRA 5.0
State Bank of India 5.0
Low 4.9
High 5.1
Average 5.0
Median 5.0

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