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Informist, Thursday, Jun. 12, 2025

 

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--India May CPI inflation 2.82% vs 3.16% Apr
--Informist poll estimated India May CPI inflation at 3.0%
--India May CPI inflation of 2.82% lowest since Feb 2019 
--India May CPI food inflation 0.99% vs 1.78% Apr
--India May CPI core inflation 4.2% vs 4.1% Apr 
--India May CPI core inflation of 4.2% highest since Oct 2023 
--India May CPI rural inflation 2.59% vs 2.92% Apr 
--India May CPI urban inflation 3.07% vs 3.36% Apr
--India May CPI general index up 0.2% on month 
--India May CPI food price index down 0.1% on month
--India May CPI cereals and products index down 0.6% on month 
--India May CPI vegetable index up 0.1% on month 
--India May CPI pulses and products index down 1.7% on month
--India May CPI oils and fats index up 0.5% on month
--India May CPI food, beverage index up 0.1% on month 
--India May CPI housing index up 0.2% on month 
--India May CPI clothing, footwear index up 0.2% on month 
--India May CPI fuel and light index up 0.8% on month
--India May CPI miscellaneous index up 0.3% on month

 

MUMBAI – India's headline CPI inflation fell to an over six-year low of 2.82% in May as food prices continued to decline even as core inflation rose, data released by the statistics ministry Thursday showed. The last time inflation was lower than May print was in February 2019, when it was 2.57%. This is also the first sub-3% retail inflation print since April 2019.

 

At 2.82%, retail inflation in May is lower than the consensus estimate. According to an Informist poll, headline inflation was seen at 3.0% in May. CPI inflation was 3.16% in April and 4.80% in May 2024.

 

This is the seventh consecutive month when CPI inflation has declined, and also the fourth consecutive month when it has stayed below the Reserve Bank of India's medium-term target of 4%.

 

Food inflation fell to 0.99% in May, the lowest since October 2021. Core inflation--which excludes food and fuel items, whose prices can be volatile--rose to a 19-month high of 4.2% in May, but only a tad higher than 4.1% in April.

 

While headline inflation moderated in May, the general index of the CPI rose 0.2% from April, led by month-on-month rise in housing, fuel and light, and miscellaneous indices. The food price index, on the other hand, fell 0.1% on month in May, dragged down by a 1.7?cline in the pulses index and 0.6?ll in the cereal index. The vegetable price index, on the other hand, rose 0.1% on month in May.

 

Rural inflation moderated to 2.59% in May from 2.92% in the previous month. Urban inflation also eased to 3.07% last month from 3.36% in April.

 

"While food prices can be extremely volatile, supportive weather conditions should keep food inflation anchored over the coming months," Shilan Shah, deputy chief emerging markets economist at Capital Economics, said in a note. Shah noted that underlying price pressures are likely to build over the coming months, referring to core inflation, as economic growth holds up well. "But we aren't expecting a sharp rise in core inflation given that household inflation expectations remain subdued," he said.

 

The May print implies that June CPI inflation could be 2.6-2.8%, with the RBI projecting Apr-Jun inflation at 2.9%. Economists said inflation could moderate further in June from May. ICRA expects headline CPI inflation to be around 2.5% in June.

 

The latest print will provide further comfort to the RBI and its Monetary Policy Committee, which last week lowered the repo rate by a higher-than-expected 50 basis points to 5.50%. Even the rise in core inflation in May was mainly because of higher gold prices and an unfavourable base effect, economists said. Core inflation was 3.1% in May 2024.

 

The following table details sequential and annual changes in the main components of the CPI (Combined):

 

	Weight	Index for May	Month-on-month change (in %)	Year-on-year change (in %)
				May	April
Cereals and products	9.67	197.8	(-)0.6	4.77%	5.35%
Meat and fish	3.61	229.0	1.5	(-)0.39%	(-)0.35%
Egg	0.43	187.7	2.5	0.64%	0.83%
Milk and products	6.61	190.0	0.7	3.15%	2.72%
Oils and fats	3.56	187.0	0.5	17.91%	17.42%
Vegetables	6.04	177	0.1	(-)13.70%	(-)10.98%
Pulses and products	2.38	188.8	(-)1.7	(-)8.22%	(-)5.23%
Sugar and confectionery	1.36	135	0.4	4.09%	4.59%
Spices	2.5	220.9	(-)0.3	(-)2.82%	(-)3.44%
Food and beverages	45.86	196.1	0.1	1.50%	2.14%
Pan, tobacco and intoxicants	2.38	212.1	0.6	2.41%	2.08%
Clothing and footwear	6.53	196.4	0.2	2.67%	2.67%
Housing	10.07	185.8	0.2	3.16%	3.06%
Fuel and light	6.84	181	0.8	2.78%	2.92%
Miscellaneous	28.32	190.9	0.3	5.06%	5.02%
General Index	100	193	0.2	2.82%	3.16%
Consumer Food Price Index	39.06	194.5	(-)0.1	0.99%	1.78%

 

End

 

Reported by Shubham Rana

Edited by Vandana Hingorani

 

 

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