May CPI Inflation Falls to 2.82% as Food Prices Ease, Lowest Level Since February 2019
India’s Retail Inflation Drops to 2.82% in May 2025
The Consumer Price Index (CPI) data revealed that India’s retail inflation for May 2025 registered at 2.82%, a decrease from the 3.16% recorded in April. This figure, released by the Ministry of Statistics & Programme Implementation on Thursday, reflects a decline of 34 basis points compared to the previous month. Notably, this is the lowest year-on-year inflation rate since February 2019, following a peak of 6.21% in October, which marked a 14-month high. The decrease surpassed expectations, as a CNBC-TV18 survey had estimated May’s inflation at 2.95%.
Food Price Index and Sectoral Breakdown
The year-on-year inflation rate for the All India Consumer Food Price Index (CFPI) in May 2025 was provisionally set at 0.99%, with rural inflation at 0.95% and urban inflation slightly higher at 0.96%, according to NSO data. Food inflation experienced a sharp 79 basis points drop compared to April 2025, marking the lowest level since October 2021.
Factors Contributing to Inflation Decline
The notable decline in both general and food inflation during May is largely attributed to price drops in several categories, including pulses and their products, vegetables, fruits, cereals, household goods and services, sugar, confectionery, and eggs. Additionally, a favorable base effect played a significant role. Provisional data indicated that rural headline and food inflation for the reviewed month was at 2.59%, compared to 2.92% in April 2025, while urban inflation decreased from 3.36% in April to 3.07% in May.
Detailed Inflation Insights
Food inflation saw a sharper drop from 1.64% in April to just 0.96% in May. Specifically, vegetable inflation fell to -13.70% in May from -10.98% the previous month, and pulses and products inflation decreased to -8.22% from -5.23%. Conversely, cereals and products inflation remained relatively steady at 4.77%, with milk and products inflation at 3.15%. Fuel and light inflation was recorded at 2.78%.
Sector-Specific Inflation Trends
Housing inflation rose to 3.16% in May from 3.00% in April, whereas inflation for clothing and footwear remained unchanged at 2.67%. Health-related inflation was recorded at 4.34%, and education inflation stood at 4.12%.
Expert Analysis and Future Projections
In response to these findings, Radhika Rao, Executive Director and Senior Economist at DBS Bank, commented, “India’s inflation figures closely aligned with our expectations for May, remaining below 3%—the lowest since mid-2019. Although select perishable food items saw slight increases on a month-to-month basis, their year-over-year moderation contributed positively to the overall headline figure. Easing core-core indicators suggest economic slack, reinforcing recent steps to enhance monetary and liquidity support. Monitoring the monsoon is crucial now that initial progress has halted following an early onset. We anticipate that inflation will average below 4% for the entire year, consistent with our core-core assessments.”
