Retail Inflation Hits One-Year Low at 4.75%: A Deep Dive

Retail inflation in May eased to a one-year low of 4.75 percent as some kitchen item prices marginally declined. The Consumer Price Index was 4.83 percent in April and 4.31 percent in May 2023. Food basket inflation in May was 8.69 percent, slightly down from April's 8.70 percent.

In a promising development for consumers, retail inflation eased to a one-year low of 4.75 percent in May, driven by a slight decline in prices of some kitchen essentials, government data revealed on Wednesday.

The Consumer Price Index (CPI) based retail inflation stood at 4.83 percent in April 2024, with the previous low recorded at 4.31 percent in May 2023.

Food basket inflation also saw a slight reduction, dipping to 8.69 percent in May from April's 8.70 percent, according to the National Statistical Office (NSO).

Headline inflation has shown a gradual decline since February 2024, inching down from 5.1 percent in February to 4.8 percent in April.

The Reserve Bank of India (RBI) has been entrusted with the task of maintaining CPI inflation at 4 percent, allowing for a 2 percent margin on either side.

Earlier this month, the RBI projected CPI inflation for the fiscal year 2024-25 at 4.5 percent, with quarterly forecasts at 4.9 percent for Q1, 3.8 percent for Q2, 4.6 percent for Q3, and 4.5 percent for Q4, guiding its bi-monthly monetary policy decisions.

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