India's inflation likely rose in May

India will release a number of data points in the next few days, with CPI data likely to be the focus. After temporarily dipping below 5% in April, May CPI inflation (due on 12 June) likely rose to 5.21% y/y on higher food prices. 

The crop damage from unseasonal rainfall likely to drove up retail prices of pulses by 3.5-12.5% and of vegetables by 8% m/m. 

The double-digit increase in retail fuel prices - reflecting a rise in global oil prices - added to inflationary pressures. 

Higher inflation in May versus April is unlikely to surprise the market, as this is partially anticipated. April industrial production (IP) is also released on 12 June. 

"We expect a 0.2% y/y contraction, after rising 2.1% y/y in March, due to an unfavourable base effect, and still-weak exports and infrastructure activity weighing on headline growth", says Standard Chartered.