India’s CPI inflation accelerated to 3.93% in May 2026 from 3.48% in April, according to provisional data released by the Ministry of Statistics and Programme Implementation on Friday. The reading was lower than the CNBC-TV18 poll estimate of 4.08%.The May reading marks the highest CPI inflation print of 2026 so far, with inflation rising from 2.74% in January.
Food inflation also moved higher during the month. Inflation based on the Consumer Food Price Index (CFPI) stood at 4.78% in May, compared with 4.20% in April, broadly in line with the CNBC-TV18 poll estimate of 4.80%.
The rise in headline inflation was largely driven by food prices, with rural food inflation increasing to 4.85% from 3.74% a month earlier, while urban food inflation rose to 4.66% from 3.16%.At the headline level, rural inflation stood at 4.25%, while urban inflation was lower at 3.53%. Housing inflation remained largely stable at 2.12%, marginally lower than 2.15% in April.Among other categories, inflation in clothing and footwear rose to 2.98% from 2.80%, while restaurant and accommodation services inflation accelerated sharply to 5.75% from 4.20%. Inflation in health eased to 1.49% from 1.64%, and information and communication services inflation moderated to 0.30% from 0.50%.Meanwhile, inflation in the personal care and miscellaneous goods and services category remained elevated at 18.46%, up from 17.66% in April.The government said price data were collected from 1,407 urban markets, including online platforms, and 1,465 villages across states and Union Territories. The response rate for May stood at 100% in both rural and urban markets.The CPI inflation reading for June 2026 will be released on July 13.What economists are sayingRadhika Rao, Senior Economist and Executive Director at DBS Bank, said higher prices of vegetables, edible oils, cereals, pulses and milk products likely drove the increase in May inflation, with heatwave conditions adding to food price pressures. She also flagged the recent rise in pump fuel prices, along with higher CNG and commercial LPG rates, as factors that could feed into inflation in the coming months.However, Rao noted that despite concerns around the West Asia conflict, India’s inflation remains below the midpoint of the RBI’s 2-6% target range, making it “less of an immediate policy concern”.Garima Kapoor, Deputy Head of Research and Economist at Elara Capital, said May CPI inflation came in “a tad below the expectation of 4%” despite elevated food and fuel prices. She said the macroeconomic backdrop has turned “less adverse” following recent policy measures and expectations of easing geopolitical tensions. Kapoor expects inflation to average 5.2-5.3% in FY27 and sees the RBI raising rates by 50 basis points in H2FY27.
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