Retail Inflation comes down to 4.75% in May, lowest in a year.

India saw a decrease in headline retail inflation to 4.75 percent in May 2024, the lowest in a year, as reported on June 12. The CPI (Consumer Price Index) based retail inflation has been on a declining trend since the year beginning, a rate of  4.83% being recorded in April- the lowest after 4.31% which was recorded in May, 2023. The headline rate continues to be under 5% for three consecutive months, since March 2024.

Core Inflation that excludes food and fuel is at 2.97%, the lowest as compared to previous years. However, no siginificant changes were seen in the CPFI (Consumer Price Food Index) and it continued to remain at 8.69% versus 8.7% in the previous month.

In the most recent policy review, the Reserve Bank of India (RBI) kept its FY25 inflation forecast at 4.5 percent but noted that food prices might remain sticky.

The decrease in headline inflation was due to a smaller decrease in fuel and light category in May compared to the previous month. However, the inflation rate for food and beverages stayed constant at 7.87 percent compared to the previous month, April.

The RBI has been asked by the Government to maintain the CPI inflation rate at 4% with a margin of 2% on either side.  RBI s projections for CPI inflation for the current year was at 4.5%, with 4.9% in Q1, 3.8% in Q2, 4.6% in Q3 and 4.5% in Q4.