India’s retail inflation stayed below the Reserve Bank’s 4% target for the fourth straight month in May on easing food prices, reinforcing the case for last week’s surprise 50 basis point interest rate cut by the central bank.

(Reuters) - India's annual retail inflation slowed to 2.82% in May from 3.16% in May on the back of a slower rise in food prices, government data showed on Thursday. The inflation print was below economists' estimate of 3% in a Reuters poll.

India inflation is likely to average around 2.5 per cent for the next six months, lower than the RBI's forecast of 3.5 per cent, an HSBC report said on Friday. The June inflation print is trending a tad lower than May levels.