The Consumer Price Index (CPI) based retail inflation dipped to an over six-year low of 2.82 per cent in May, 2025. There is decline of 34 basis points in headline inflation of May, 2025 in comparison to April, 2025 when it was 3.16 per cent. The dip is mainly due to subdued prices of food items, including vegetables, fruits, and protein-rich items, showed government data released on Thursday.
Food inflation was at 0.99 per cent in May, significantly down from 8.69 per cent in the year-ago month, according to data of the National Statistics Office (NSO). The food inflation in May, 2025 is the lowest after October, 2021.
"The significant decline in headline inflation and food inflation during the month of May 2025 is mainly attributed to a decline in inflation of pulses & products, vegetables, fruits, cereals & products, households goods & services, sugar & confectionary and egg and the favourable base effect," NSO said in a statement.
Further boost to consumer and industry sentiments: PHDCCI
Hemant Jain, President of PHDCCI, said that the inflation data provides a substantial boost to households and businesses.
This softening of CPI inflation has been supported by a significant decline in food inflation. The year-on-year inflation rate, based on the All India Consumer Food Price Index (CFPI), for the month of May 2025 compared to May 2024 is 0.99% (provisional), which is the lowest since October 2021, said Jain.
Headline inflation now comfortably below the RBI’s 4% target
"With headline inflation now comfortably below the RBI’s 4 per cent target and interest rates increasingly accommodative, the disinflation trend will provide some relief to the RBI that can keep the interest rates in check to aid recovery, which is already afoot. Going ahead, the progress of the monsoon will remain a key factor in keeping the inflation trajectory in check,” Sankar Chakraborti, MD & CEO, Acuite Ratings & Research Limited.
