Retail inflation is lowest in 25 months, eases to 4.25% in May

This is the third month in a row that CPI based inflation has remained within the RBI’s comfort zone of below 6%, and is the lowest since April 2021 when it was 4.23%.

There is good news for the people, as retail inflation has declined to a 25 month low of 4.25% in May, 2023. This has happened on account of softening prices of mainly food and fuel items. This is the fourth straight month when retail inflation has declined owing to constant efforts being made by the Reserve Bank of India (RBI).

This is also the third month in a row that Consumer Price Index (CPI) based inflation has remained within the RBI’s comfort zone of below 6%, and is the lowest since April 2021 when it was 4.23%. A sharp fall in international prices of LPG and kerosene can also be the contributory factors to this softening of inflation in May. Normally, the government wants to ensure that the CPI-based inflation remains at 4% with a margin of 2% on either side.

The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) has released All India Consumer Price Index (CPI) on base 2012=100 and corresponding Consumer Food Price Index (CFPI) for Rural (R), Urban (U) and Combined (C) for the month of May 2023.

There is another good news on the economic front. The Quick Estimates of Index of Industrial Production (IIP) released on 12th of every month with a six weeks lag and compiled with data received from source agencies, are also encouraging.

For the month of April 2023, the Quick Estimates of IIP with base 2011-12 stands at 140.2. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of April 2023 stand at 122.5, 138.1 and 192.3 respectively. However, these Quick Estimates will undergo revision in subsequent releases as per the revision policy of IIP.

The indices stand at 142.1 for Primary Goods, 94.0 for Capital Goods, 150.7 for Intermediate Goods and 168.8 for Infrastructure or Construction Goods for the month of April 2023. Further, the indices for Consumer durables and Consumer non-durables stand at 106.8 and 153.7 respectively for the month of April 2023.