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According to NSO Report "Retail Inflation Drops to 75-Month Low of 2.82% in May 2025".

Economy Business | Dated: 17 Jun 2025

June 2025 – The National Statistical Office (NSO), operating under the Ministry of Statistics and Programme Implementation (MoSPI), has released updated figures for the Consumer Price Index (CPI) covering rural, urban, and combined segments for May 2025. As per the report, India’s retail inflation (measured through CPI) declined sharply to 2.82%, marking a 75-month low, a fall of 34 basis points (bps) from 3.16% in April 2025.

🎯 Key Highlights:

  • - The current CPI rate of 2.82% in May 2025 is the lowest year-on-year retail inflation since February 2019, when it was recorded at 2.57%. This marks the fourth consecutive month that inflation has remained below the Reserve Bank of India’s (RBI) medium-term target of 4%, indicating a moderating inflationary trend across the economy.
  • - A significant drop in headline inflation was driven by a notable fall in food prices, a favourable base effect, and reduced costs of essential commodities, collectively easing inflationary pressure across rural and urban sectors.
  • - According to the NSO, the Consumer Food Price Index (CFPI) showed a year-on-year increase of just 0.99% in May 2025 compared to May 2024. This significant moderation reflects better supply chain conditions, increased availability, and relatively stable food prices at the consumer level.

💡 Other Important Facts:

  • (i) While headline inflation eased, core inflation (which excludes the volatile food and energy segments) rose slightly to 4.28% in May 2025, up from 4.23% in April 2025. This marks the highest core inflation level since October 2022, indicating persistent price pressures in non-food sectors such as housing, healthcare, and education.
  • (ii) Among the states and union territories, Kerala posted the highest year-on-year retail inflation at 6.46% for May 2025, followed by Punjab at 5.21%. These state-level figures are significantly above the national average, likely due to regional consumption patterns and supply-demand imbalances.
  • (iii) With overall inflation staying well below the RBI’s 4% target, this trend could prompt the Monetary Policy Committee (MPC) to maintain an accommodative stance or even consider policy rate adjustments. However, the rise in core inflation may lead to caution in policy moves, as broad-based price stability is yet to be fully achieved.

📚 Test Your Knowledge:

Recently, what was the recorded food inflation rate in May 2025 as per the Consumer Food Price Index (CFPI)?

Correct Answer: 0.99%

🚀 Quick Recap: