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.

Retail inflation plummeted to a 75-month low in May as food prices eased sharply. It is expected to moderate further in June, which may prompt the Reserve Bank of India (RBI) to hit a pause in its rate-cutting cycle after undertaking a "jumbo" cut earlier this month to support growth in the face of easing price pressures.