Bank of Baroda Chief Economist Madan Sabnavis on May CPI
This story was originally published at 17:12 IST on 12 June 2026
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NEW DELHI - Madan Sabnavis, chief economist, Bank of Baroda, said the following on India's CPI inflation for May:
CPI inflation for May was 3.9%. Inflation is expected to move upwards at a differential pace in the coming months depending on transmission of higher energy prices to different products. Subsequently, the monsoon impact will get reflected in food product prices. The monsoon is already delayed and advice given to farmers was to wait for the rains to arrive before sowing seeds for the relevant crops.
The inflation numbers are interesting as the higher inflation number of 3.9% against 3.5% in April was still driven by food prices with inflation being 4.8%. Food price inflation has been high due to specific products witnessing higher prices such as tomato even as others showed declines. Edible oils continue to witness higher price increases.
The direct impact of the price increases of fuel products starting with liquefied petroleum gas, compressed natural gas, petrol, and diesel is revealed in higher prices of transport of goods, transport by own vehicle, glass products.
The other area within services where prices have gone up sharply was restaurants with inflation of 5.8%. This is a direct impact of energy prices going up as well as food raw materials, which has caused them to increase prices.
The personal care group has inflation of 18.5% mainly due to gold and silver prices. But this should ease sharply in the coming months with the price of these metals coming down. However, the higher duty imposed would continue to exert pressure on prices.
We do expect inflation for the year to range between 5.2-5.5% on the assumption of oil being on an average $90-$100 per barrel. End
Compiled by Shubham Rana
Filed by Rajeev Pai
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