Retail inflation reaches a 6 -year hollow to 2.82% in May, driven by cooling food prices
Retail inflation in India took place at 2.82% in May 2025, the lowest annual rate since February 2019, according to government data published Thursday. Reading reflects a decrease of 34 basic points compared to 3.16% of April, reporting a net slowdown in consumer price growth. This moderation was largely motivated by a continuous drop in food prices and wide cooling in key consumption categories.
The cooling trend was mainly led by a significant drop in food inflation, which fell to 0.99% in May, against 1.78% in April. Rural and urban food inflation was closely aligned at 0.95% and 0.96%, respectively.
Vegetable prices played a key role in decrease, posting a 13.7% drop in annual shift in May, dropping through 11% in April. Cereal inflation was also held, prices increasing by 4.77% in May, compared to 5.35% the previous month.
The pulse category experienced a clearer contraction, the prices falling apart by 8.22% in May, a lower drop than the decrease of 5.23% recorded in April.
According to the government, the drop in the inflation of broad -base titles and food has been supported by slower prices growth between essential items, including pulses and products, vegetables, fruits, cereals, household items and services, sugar and confectionery and eggs.
The favorable basic effect and the softening of prices in the categories of key foods contributed to the high moderation of inflation, offering relief to consumers and support for the position of the monetary policy of the reserve bank of India.
Central inflation, which excludes the volatile components of food and fuel, increased slightly to 4.2% in May, against 4.1% in April, reaching its highest level since October 2023. Despite the increase, overall inflationary pressures remain moderate.
The month in months, the general IPC index increased by 0.2%, with notable movements in certain segments. The fuel and light index increased by 0.8%, while oils and fats experienced a 0.5%increase. Various items climbed 0.3%and modest increases were observed in clothing and shoes (0.2%), housing (0.2%) and vegetables (0.1%).
Inflation in urban areas fell to 3.07% in May, against 3.36% in April, while rural inflation increased to 2.59% against 2.92% over the same period.
The latest inflation figures suggest a favorable perspective for the reserve Bank of India, which continues to monitor price trends in the world of global economic uncertainties and normal monsoon prospects.
Aditi Nayar, chief economist and chief – Research and awareness of ICRA LTD, said that ICC inflation has cooled at least 75 months of 2.8% in May 2025, led by high moderation in the food and drinks segment, which dropped to a low of 73 months of 1.5% compared to 2.1% in April.
“The Core-CPI inflation took place at 4.3% in May 2025, against 4.4% in the previous month. In the future, on a gidal basis, up to 17 of the 22 foods for which daily data is published, recorded inflation in Yoy weaker in June 2025 (until June 10, 2025) vis-à-vis the most in May, shortly time in June and oils in June. 2025, largely due to a high base.
