India inflation likely eased to a five-month low in April amid coronavirus-enforced lockdown

Indian retail inflation fell to a five month low in April amid the nationwide lockdown imposed to quell the spread of the coronavirus.

According to a Reuters poll, the economic inactivity caused by the lockdown has been a big driver for inflation in April, leading to a broad-based deceleration in price pressures across all components except food.

The May 5-7 poll median of more than 40 economists predicted India's annual consumer price inflation fell to 5.68 per cent in April from March's 5.91 per cent, still above the Reserve Bank of India`s (RBI) medium-term target of 4.00 per cent.

Forecasts in the Reuters poll ranged between 4.50 per cent and 7.00 per cent and about 80 per cent of participants expected inflation to be below the upper band of the RBI`s inflation target range of 2.00-6.00 per cent.

While the lockdown was extended to May 17, the government has allowed considerable relaxations in lower-risk districts, which might help lift the economic slowdown experienced since March.

That inflation rate, if realised, would allow the central bank to keep policy loose to combat the unprecedented impact of the pandemic which has battered the economy.

(with inputs from Reuters)