New Delhi: India’s Consumer Price Index (CPI) inflation took a sharp strike falling down to 4.25 per cent in May hitting a 25-month low. CPI once again came down under the Reserve Bank of India’s upper tolerance limit of 6 per cent. Retail inflation for May fell from 4.7 per cent in April 2023 and 7.04 per cent compared to a year back.

CPI figures

Retail inflation for vegetables stood at 8.18 per cent in May, on the other, the inflation rate for oils and fats shrank by 16 per cent. The rate of inflation for cereals products was at 12.65 per cent, whereas, dairy products and spices stood at 8.91 per cent and 17.9 per cent respectively.

Retail inflation rates for cereals and beverages were at 3.29 per cent in May, fuel and light at 4.64 per cent with housing at 4.84 per cent.

“Inflation softened further in May as a high base effect continued to pull down the prints. Food inflation continued to moderate and it was encouraging to see a seasonally adjusted sequential decline in the headline inflation as well,” stated Sakshi Gupta, Principal Economist, HDFC Bank, Gurugram.

Gupta further added, “Inflation is expected to print below 5 per cent again in June although moving higher from Q2 onwards.”

In april, retail inflation was seen easing to an 18-month low of 4.7 per cent as compared to 5.66 per cent in March, basically due to moderation in food prices, accounting for nearly half of the overall consumer price basket.

Earlier, experts had anticipated retail inflation to be going down below 4 per cent; the midpoint of the RBI’s target and a level last recorded in January 2021, as per new agency Reuters.