India’s retail inflation cooled to a six-year low of 2.82% in May 2025, easing from 3.16% in April and 4.8% a year ago, driven by a sharp moderation in food prices, according to provisional data released by the Ministry of Statistics and Programme Implementation (MoSPI). This marks the fourth consecutive month of sub-4% inflation—the longest such run in over five years. Food inflation dropped to 0.99% in May from 1.78% in April and 8.69% in May 2024. Prices of meat, fish, vegetables, and pulses declined, offering relief to households. However, prices of milk, dairy products, edible oils, and beverages remained sticky.
The data follows the Reserve Bank of India’s (RBI) recent 50 basis points repo rate cut to 5.5%, part of a broader easing cycle that began in February and has seen cumulative reductions of 100 basis points. Economists now expect inflation to average below 4% for FY26, with projections ranging from 3.6% in Q1 FY26 to 4.4% by year-end. While inflation eased across key food categories, core inflation stayed within the 4–4.5% range. 12 out of 22 major states recorded inflation below the national average. Economists view the current trend as favourable for growth and equity markets but caution that the RBI may hold further easing moves for now, pending future data.
Source : Dairynews7x7June 13th 2025 IBEF