By Ed Frankl
Inflation in India eased for the fifth-straight month in May as it edged down slowly to the Reserve Bank of India's target, following surprise election results that could cloud the economic outlook for the nation.
The country's consumer-price index rose 4.75% on year in the month, a small decline from the 4.83% reported in April, according to figures released Wednesday by the Indian government. Economists had expected annual inflation to be at 4.8%, according to a consensus compiled by FactSet.
The rate marks a one-year low, having been 4.3% in May 2023.
Food inflation, which makes up the lion's share of the CPI basket, remained at 7.9%, the same as in April. Urban inflation in May was 4.15%, while rural inflation was 5.3%.
Though headline inflation is still above the RBI's 4% target, it has a tolerance band of 2% above and below that level. The central bank kept its key policy rate at 6.5% for the eight consecutive meeting in a row last week, and forecasts annual inflation at 4.5% for this fiscal year.
It came after voters denied incumbent Prime Minister Narendra Modi a majority in national elections, despite returning him to the top post, potentially complicating some fiscal choices ahead for the world's most populous country.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
06-12-24 0842ET
