India’s retail inflation fell to 2.82% in May from 3.16% in April, the lowest year-on-year rise in consumer prices since February 2019, government data showed on Thursday.
This is the fourth consecutive month that inflation has been below the RBI’s 4.0% medium-term target, the longest streak in nearly six years.
The decline was mainly due to a sharp fall in food inflation, which eased to 0.99% in May from 1.78% in the previous month amid lower prices of pulses, vegetables, fruits, cereals, eggs, sugar and household goods.
“The significant decline in core inflation and food inflation in the month of May 2025 is mainly due to a decline in inflation in pulses and products, vegetables, fruits, cereals and products, household goods and services, sugar and confectionery and eggs and favourable base effect,” the NSO said in a statement. Rural inflation declined from 2.92% in April to 2.59% in May, while urban inflation declined from 3.36% to 3.07% in the same period. However, housing inflation rose from 3.06% a month ago to 3.16% in May, while health inflation increased from 4.25% to 4.34%. Education inflation remained almost unchanged at 4.12%, and transport and communication costs rose from 3.67% to 3.85%. Inflation has remained low since the Reserve Bank of India surprised markets by cutting the repo rate by 50 basis points last week to boost economic growth.
