CPI Inflation Eased to 2.82% in May 2025 - Check Out the Items Whose Prices Have Fallen

The common man is finally heaving a sigh of relief as the raging inflation slows on the back of monetary measures introduced by the Reserve Bank of India (RBI), improved agriculture, and a host of other factors. As per the data released by the National Statistics Office (NSO), the Consumer Price Index (CPI) inflation dropped to a six-year low of 2.82% in May 2025, falling from 3.16% a month ago. As per the analysts, the fall of 0.34% is more than expected.

Declining Food Prices Contribute to Low CPI Inflation

Data reveals the sharp decline in food prices has contributed to the overall low inflation. Food inflation slumped to 0.99%, the lowest since 2021. Further, it was significantly lower than 1.78% in April 2025. As far as rural inflation is concerned, it declined to 2.59% in May from 2.92% in April. While rural food inflation remained at 0.95%, urban food inflation stood at 0.96%.

Heres the Rate of Inflation Across Food Items

Food inflation has reduced considerably over a year with prices of essential items such as vegetables and pulses declining steadily. The table below shows the CPI data for food and non-food items. Check this out to know the decline.

Easing Inflation Raises Scope for Further Monetary Policy Easing by the RBI

As the headline inflation cooled to 2.82% in May 2025 owing to the fall in food prices, the RBI might cut the repo rate for one more time in the year. Since February 2025, the RBI has cut the Repo Rate, the rate at which it extends credit to commercial banks across India, to 5.50%, a 100 basis points decrease in the year so far. 100 basis points mean 1%. The further rate cut will also depend on how good the monsoon remains. The increased food supply will further bring down the prices, softening the headline inflation further.

Conclusion

After a couple of years battered by high inflation owing to global supply shocks induced by the Russia-Ukraine war and below-expected rainfall, the prices have started softening, allowing people more in hand to carry on their lifestyle. For more economic updates, keep coming to WikiFX, where you find genuine information about forex brokers globally.