Inflation for Consumers at 8.28% in May, Slightly Lower than April


Consumer Price Inflation for May 2014 was at 8.28%, a tad lower than April’s 8.59%.


From a component level, we find that Food remains high at +9.3%, but Fuel has moderated. (Largely because diesel price increases were kept on hold during elections) Transport costs are at +7.2%, higher than recent months.


And the rural folks saw inflation falling a little more than the urban folks. But the impact is not huge:


My take: Inflation stays low, triggers feeling that interest rates will come down. This is positive for us in general, but the risks are a bad monsoon. We currently have 44% less rains than normal, but this situation can change dramatically in the next few days.

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