The Business Bytes
THEBUSINESSBYTES BUREAU
NEW DELHI, JUNE 13, 2025
In a major economic milestone, India’s retail inflation has cooled to a 75-month low of 2.82 per cent in May 2025, sharply contrasting the double-digit inflation seen during the UPA era. Food inflation dropped to 0.99 per cent, its lowest since October 2021, signalling a period of price stability under the Modi-led government.
The data, released by Infoindata on social media platform X and confirmed by the Ministry of Statistics, highlights a consistent trend of easing prices. May’s figures mark the lowest consumer price index (CPI) inflation since February 2019, driven by falling prices of essential commodities such as vegetables, pulses, cereals, sugar, eggs, and household goods.
The sharp moderation in food and fuel prices, aided by strong agricultural output and softening global crude oil rates, has allowed the Reserve Bank of India (RBI) to revise its inflation outlook. The central bank now forecasts inflation at 3.7 per cent for FY2025-26, down from the earlier 4% estimate.
RBI Governor Sanjay Malhotra noted that inflation has consistently remained below the 4 per cent target for six months, after breaching the upper tolerance band in October 2024. “This trend reflects a broad-based and sustainable improvement,” he said.
Projections for upcoming quarters now stand at 2.9 per cent for Q1, 3.4 per cent for Q2, 3.9 per cent for Q3, and 4.4 per cent for Q4.
In response, the RBI announced a surprise 50 basis point repo rate cut, reducing the benchmark rate to 5.5 per cent. It also slashed the Cash Reserve Ratio (CRR) by 100 basis points in four tranches, expected to release ₹2.5 lakh crore into the banking system — an aggressive move to spur lending and economic growth.
