India's retail inflation eases at 25-month low to 4.25 per cent in May

Retail inflation, measured by consumer price index (CPI) declined to 4.25 per cent in May from 4.70 per cent in April and 5.60 per cent in March, showed data released by the National Statistical Office on Monday.

CPI based inflation has remained within the Reserve Bank of India’s (RBI) tolerance band of 2-6 per cent for the third consecutive month.

The inflation in May has fallen to a 25-month low mainly due to the easing of food prices such as cereals and vegetables. A sharp fall in international prices of LPG and Kerosene can also be linked with the lower fuel inflation in May. April's inflation numbers were the lowest in 18 months.

While the retail inflation was 7.04 per cent in May 2022, in a drastic rise due to Russia's invasion of Ukraine.

The consumer food price index (CFPI) eased to 2.91 per cent in May from 3.84 per cent in April. Rural inflation stood at 4.17 per cent while urban inflation stood at 4.27 per cent.

Sequentially, the inflation remained unchanged at 0.51 per cent in May.

Inflation rate for vegetables witnessed a contraction of 8.1 per cent in May. The inflation levels for food & beverage and fuel segments stood at 3.29 per cent and 4.64 per cent, respectively. For cereals, the inflation rate came in at 12.65 per cent as against 13. 67 per cent.

India's retail inflation was above RBI's 6 per cent target for three consecutive quarters and had managed to fall back to the RBI's comfort zone only in November 2022.