Retail Inflation for Industrial Workers Eases to 3.86% in May 2024
According to the Ministry of Labor, retail inflation for industrial workers in India has declined to 3.86% in May 2024, marking a reduction from the 4.42% rate recorded in May 2023. This moderation in inflation represents a downward trend from the 3.87% rate observed in April 2024.
The All-India Consumer Price Index-Industrial Workers (CPI-IW) has slightly increased to 139.9 points in May 2024, up from 139.4 points in April 2024. This increase is primarily driven by a rise in the food and beverages group, which has risen to 145.2 points in May from 143.4 points in April. However, the fuel and light segment has experienced a decline, dropping to 149.5 points in May from 152.8 points in April 2024.
The Labour Bureau, under the Ministry of Labor & Employment, compiles the CPI-IW monthly based on retail prices collected from 317 markets across 88 key industrial centers in India.
Consumer Price Inflation Forecast to Rise in June 2024
Despite the decline in May, consumer price inflation in India is projected to increase in June 2024, ending a five-month trend of decreasing inflation. A Reuters survey of economists attributes this anticipated increase to a surge in vegetable prices due to crop damage caused by extreme weather conditions. The prices of tomatoes, onions, and potatoes have witnessed a significant rise in the past month due to extreme heat and heavy floods in northern states, leading to disruptions in agricultural production.
The Reuters poll, conducted from July 5-9 and involving 54 economists, forecasts that consumer price inflation will reach 4.80% year-on-year in June, up from 4.75% in May. Food items constitute approximately half of the total CPI basket.
Core inflation, excluding volatile items such as food and energy, is projected to reach 3.10% in June, according to the median estimate from a smaller group of 19 economists. While the Indian statistics agency does not officially publish core inflation figures, economists derive estimates from CPI data.
