According to data that was made available by the National Statistical Office (NSO) on Monday, India’s retail inflation in May dropped to a level of 4.25 percent, marking the lowest level in 25 months. In the meantime, India’s Index of Industrial Production (IIP) for the month of April increased dramatically to 4.2 percent, up from 1.1 percent in March.
The headline inflation, also known as consumer price inflation (CPI), was 4.25 percent last month, which meant that it stayed below the upper barrier of the medium-term objective that the Reserve Bank of India has set at 4 plus or minus 2 percent.
The rate of retail inflation has remained within the RBI-established range of acceptable variation for the third month in a row. When compared to its level in March, which was 5.66 percent, India’s retail inflation decreased to an 18-month low of 4.70 percent in the month of April.
In May, the consumer food price index (CFPI) came in at 2.91 percent, down from 3.84 percent in April.
The inflation rate in urban areas of India was 4.27 percent in the most recent month, while the inflation rate in rural areas was 4.17 percent.
The Reserve Bank of India lowered its prediction for India’s inflation to 5.1 percent for the fiscal year 2024 from 5.2 percent in its most recent biweekly monetary policy statement. At the same time, it prolonged the hold on repo rate hikes and maintained the benchmark lending rate at 6.50 percent.
The central bank said, “The pace of monetary tightening has slowed in recent months, but uncertainty remains on its future trajectory as inflation continues to rule above targets across the world.”
“(For India) Close and continued vigil on the evolving inflation outlook is absolutely necessary, especially as the monsoon outlook and the impact of El Nino remain uncertain,” it added.
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