Inflation based on Consumer Price Index likely to touch 5.7pc in May:Barclays
Inflation based on Consumer Price Index likely to touch 5.7pc in May:Barclays
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An extensive increase in food and core Consumer Price Index inflation (CPI) components should push CPI inflation up to 5.7 percent year on year in May, Barclays said.

In a research report focused on India, the investment banker said that after moderating for two quarters and moving closer to RBI's target, the CPI inflation will likely accelerate in the coming months. "We expect it to rise to 5.7 percent in May from 4.3 percent in April. The 140bp increase in headline CPI will likely be driven by the combination of a low base effects and a broad-based sequential increase in prices across major CPI components," Barclays said.

The investment banker's assertions on inflation is also based on seasonal factors where in summer months food prices tend to rise sequentially, and in May prices increased across the board for food components. While the release of buffer stocks could to keep price rises for cereals in check, prices of proteins and edible oils are showing sustained upward momentum. Seasonal factors play a part, pushing up prices of perishables such as vegetables and fruits, and modest gains are likely in prices for milk, eggs and meat, as of transportation and storage costs increase amid rising motor fuel prices will add to handling and freight costs, Barclays said.

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