12 Jun 2023

Retail Inflation Rate Lowest In 25 Months, What Led To Fall

The retail inflation rate in the country has come down to 4.25% in May. This is the lowest level of inflation in 25 months. 


This drop in inflation is due to the fall in the prices of food items. Earlier in April 2023, the retail inflation rate was 4.70%.


The last time India's headline retail inflation figure was lower than 4.25 percent was in April 2021, when it stood at 4.23 percent.


Rural inflation has come down from 4.68% to 4.17%. The urban inflation rate has come down from 4.85% to 4.27%. 


Food inflation has come down to 2.91% in May


Food articles account for about half of the Consumer Price Index (CPI) basket. Food inflation has come down to 2.91% in May. It was 3.84% in April 2023 and 4.79% in March.


Despite the huge 227-basis-point fall since January, CPI inflation remains above the Reserve Bank of India's (RBI) medium-term target of 4 percent for the 44th month in a row.


Experts say that the fall in inflation is a good sign for the economy. Inflation has come down also due to improvement in supply chain and relief in commodity prices. However, while giving information about the monetary policy meeting held this month, the RBI governor had said that the concern and uncertainty about inflation still persists.



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