India's headline inflation eases to cooler-than-expected 2.82% in May as food prices slide

India's user ostentation eased to a cooler-than-expected 2.82% successful May, the country's Ministry of Statistics and Programme Implementation reported Thursday.

The year-on-year header ostentation came successful beneath a Reuters' median canvass estimation of a 3% increase. It had risen by 3.16% successful April.

Food inflation, a cardinal ostentation metric, deed 0.99% successful May, sharply beneath the 1.78% of April.

late cut, slashing the benchmark repo complaint by 50 ground points to 5.50%, a level unseen since August 2022.

The move, spurred by easing inflation, underscores policymakers' displacement toward much assertive monetary easing to bolster economical growth. The RBI has chopped involvement rates for 3 consecutive meetings since February.

RBI Governor Sanjay Malhotra attributed the latest chopped to softening inflation, and maturation that has been "lower than our aspirations amidst a challenging planetary situation and heightened uncertainty."

Nomura economists peg India's header CPI astatine a "subdued 3.3%" for the fiscal twelvemonth 2026, undershooting the RBI's 3.7% target, citing softened commodity prices amid weakened economical enactment and an influx of inexpensive Chinese goods into the market.

The concern slope expects 2 further cuts of 25 ground points successful October and December, taking the terminal complaint to 5%.

India's system expanded astatine a faster-than-expected annual complaint of 7.4% successful the 4th ended March, higher than the 6.7% maturation estimates by economists successful a Reuters poll.

For the afloat fiscal twelvemonth 2025, the system expanded by 6.5%, successful enactment with the authorities estimates. The RBI has maintained its maturation projection for the existent fiscal year, ending successful March 2026, astatine 6.5%.

Facing a imaginable 26% tariff connected its goods, India has been successful talks with the U.S., aiming to unafraid a woody earlier the July deadline.

Indian and U.S. commercialized negotiators were close to signing an "interim" bilateral commercialized deal, Reuters reported earlier this week. The archetypal statement volition apt halfway astir marketplace entree for concern and immoderate cultivation goods, little tariffs and different non-tariff barriers, according to Reuters.