Consumer inflation eases to 2.82% in May, cooling for 7th month in a row

Domestic consumer inflation was recorded at 2.82 per cent in May, easing from 3.16 per cent the previous month, official data showed on Thursday. This marks the seventh straight month of sequential cooling in the retail prices. The latest data comes days after the Reserve Bank of India revised downward its FY26 inflation projection by 30 basis points (bps) to 3.7 per cent.

Consumer inflation—or the rate of increase in the consumer prices of select goods and services—is gauged by the Consumer Price Index (CPI).

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The May 2025 reading marks a seventh back-to-back month of sequential easing in domestic retail inflation, data shows. | Image: Ministry of Statistics & Programme Implementation

Food inflation

Food inflation—or inflation in food products or related articles—cooled to 0.99 per cent, from 1.78 per cent in April.

What helped in easing consumer prices?

The central government said that easing prices in pulses, vegetables, fruits, cereals, household goods and services, sugar and confectionary, and eggs, and a favourable bse effect mainly helped in the decline in overall and food inflation readings.

Rural vs urban inflation

Within the CPI dataset, urban inflation was estimated to have eased to 3.07 per cent and rural inflation to 2.59 per cent in May, from 3.36 per cent and 2.92 per cent in the previous month, respectively.

Key things to know about latest inflation data

The Reserve Bank of India Governor-headed Monetary Policy Committee—which decides the benchmark interest rates in the country—tracks consumer inflation data closely for formulating its monetary policy.

The latest inflation data comes days after the MPC decided to cut the repo rate by 50 basis points (bps)-or half a percentage point—to 5.5 per cent while reversing a change in stance to 'accommodative' from 'neutral'.

The RBI now projects inflation to come in at 2.9 per cent in the first quarter, 3.4 per cent in the second, 3.9 per cent in the third, and 4.0 per cent in the final quarter of the current financial year (ending on March 31, 2026). In its April bi-monthly review, the central bank pegged inflation at 3.6 per cent, 3.9 per cent, 3.8 per cent and 4.4 per cent in these quarters, respectively.

Last month, official data showed that the country's GDP growth picked up to a one-year high of 7.4 per cent in the March quarter, exiting FY25 with a 6.5 per cent expansion.