CPI declines to 25-month low of 4.25% in May

13 Jun 2023 Evaluate

Retail inflation based on Consumer Price Index (CPI) declined to a 25-month low of 4.25 per cent in May mainly on account of softening prices of food and fuel items. This is the fourth straight month when retail inflation has declined and the third month in a row that Consumer Price Index (CPI) based inflation remained within the RBI’s comfort zone of below 6 per cent. The CPI stood at 4.7 per cent in April and 7.04 per cent in May 2022. At 4.25 per cent, retail inflation is the lowest since April 2021 when it was 4.23 per cent.The government has tasked the central bank to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.

The National Statistical Office (NSO) under Ministry of Statistics and Programme Implementation in its data has showed that Rural CPI (General) in May 2023 stood at 4.17 per cent as against 4.68 per cent in April. The Urban CPI (General) stood at 4.27 per cent in May as against 4.85 per cent in April. The index value for Rural, Urban and Combined CPI (General) stood at 179.7, 178.1 and 179.0 respectively, in May 2023.

As per the data, inflation for the food basket was at 2.91 per cent in May, lower than 3.84 per cent in April. The food basket accounts for nearly half of the CPI. 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. Besides, inflation in fuel and light eased to 4.64 per cent, from 5.52 per cent in April.