Key facts
- India's retail inflation rose to 3.93% in May, up from 3.48% in April.
- Brazil's annual consumer inflation accelerated to 4.72% in May, exceeding forecasts.
- Food and beverages were the main drivers of Brazil's May inflation increase.
- Economists predict India's inflation could reach 6% by the fiscal year's end.
- Brazil's central bank targets inflation at 3%, plus or minus 1.5 percentage points.
India's retail inflation accelerated to 3.93% in May, an increase from 3.48% in April, primarily driven by rising food and fuel costs. The May reading remained close to the Reserve Bank of India's medium-term target. Economists forecast that inflation could approach 6% by the end of the fiscal year, complicating the RBI's policy choices. Risks related to the Middle East conflict and a weak monsoon threaten to add further price pressures. Core inflation stood at 3.9% in May. The RBI raised its inflation forecast for the current fiscal year to 5.1% from 4.6% earlier this month.
In Brazil, consumer inflation accelerated more than expected in May, rising to 4.72% annually, up from 4.39% in April and breaching the top of the central bank's target range. This data comes ahead of the central bank's policy meeting, where policymakers are expected to consider the inflationary pressures. Food and beverage prices were the main drivers of the increase, while transport costs fell. Central bank officials have warned of demand-driven pressures and higher oil prices impacting inflation, leading economists to anticipate a shallower interest rate easing cycle.