AGENCY
NEW DELHI, june 12
The Consumer Price Index (CPI) for May declined by 34 basis points to 2.82%, marking the lowest year-on-year inflation since February 2019, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI).
Further, food inflation saw a sharp decline of 79 basis points in May compared to April 2025, reaching its lowest level since October 2021.
The year-on-year food inflation for May 2025, compared to May 2024, stands at 0.99%. The corresponding inflation rates for rural and urban areas are 0.95% and 0.96%, respectively.
A sharp decline of 79 basis points was observed in food inflation in May 2025 compared to April 2025. The food inflation rate in May 2025 is the lowest since October 2021.
The housing inflation rate for May 2025 was recorded at 3.16% compared to 3.06% in April 2025.
Speaking on the inflation numbers, Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank, said, “The headline inflation came in broadly in line with our expectations. High frequency data shows that the vegetable and fruit prices have started surging, offsetting the downward trend visible in cereals and pulses.”
“While the overall inflation trajectory is expected to remain benign, the recent frontloaded policy actions and the guidance of limited room for incremental easing suggest a prolonged pause for now, with further actions likely to be highly data-dependent,” she added.
Hemant Jain, President of PHDCCI, said, “The marked softening of headline and food inflation in May 2025 is mainly attributed to a decline in the prices of pulses and products, vegetables, fruits, cereals and cereal products, household goods, services, sugar and confectionery, and eggs.”
“Looking ahead, we expect food inflation to cool further, supported by the anticipated good monsoon.
Moreover, crude prices are expected to stabilise within the range of US$60 to US$65 per barrel in the short to medium term, a development that will substantially boost private final consumption expenditure and, consequently, stimulate higher economic growth,” he added.
A significant decline in headline and food inflation was observed in the rural sector in May, with the rate falling to 2.59% compared to 2.92% in April.
The CFPI-based food inflation in the rural sector was observed at 0.95% in May, compared to 1.85% in April.