Retail enlargement reaches 6 years low at 2.82 % in May, driven by cooling food prices

Retail in India fell to 2.82 % in May 2025, which is the lowest annual average since February 2019, according to government data issued on Thursday. Reading reflects a decrease of 34 basis points from 3.16 % in April, indicating a sharp slowdown in consumer price growth. This moderation was largely driven by a continuous decrease in food prices and widespread base cooling through major consumption categories.

In the first place, the direction of cooling led a significant decrease in enlarged food, which decreased to 0.99 % in May from 1.78 % in April. Rural and urban food inflation is align closely at 0.95 % and 0.96 %, respectively.

Vegetable prices played a major role in the decrease, spreading a 13.7 % decrease year on year in May, deepening 11 % decrease in April. The pills also decreased, as prices increased by 4.77 % in May compared to 5.35 % in the previous month.

The category of legumes witnessed a more clear shrinkage, as prices decreased by 8.22 % in May, a sharp decrease in the decline by 5.23 % recorded in April.

According to the government, the widespread decline in both the main address and food enlargement was supported by the growth of slower prices through the basic elements, including legumes, products, vegetables, fruits, grains, home commodities, services, sugar, sweets and eggs.

The favorable primary influence and reduction in the main food categories contributed to the acute moderation in inflation, providing relief to consumers and supporting lending to the monetary policy position at the Reserve Bank.

The basic inflation, which excludes the ingredients of food and flying fuel, increased to 4.2 % slightly in May of 4.1 % in April, reaching its highest levels since October 2023. Despite the height, the total inflationary pressure remains subject to.

The month of the month, the general CPI index increased by 0.2 %, with noticeable movements in some sectors. The fuel and light index increased by 0.8 %, while oils and fats saw a 0.5 % increase. Various items increased by 0.3 %, and modest increases in clothes and shoes (0.2 %), housing (0.2 %), and vegetables (0.1 %).

Urban inflation decreased to 3.07 % in May from 3.36 % in April, while rural inflation fell to 2.59 % from 2.92 % during the same period.

The latest inflation numbers indicate positive expectations for the Indian Reserve Bank, which continues to monitor price trends amid global economic uncertainty and natural monsoon expectations.

Adity Nayyar, chief economist and head of research and awareness at ICRA LTD, said that the inflation of the consumer price index cools to its lowest level in 75 months by 2.8 % in May 2025, led by a sharp moderation in the food and beverage sector, which decreased to its lowest level in 73 months by 1.5 % of 2.1 % in April.

“Core-CPI inflation decreased to 4.3 % in May 2025 from 4.4 % in the previous month. Given the future, on an annual basis, up to 17 of 22 elements of food for which daily data is released, and recorded a decrease in Yoy ThuPncy in June 2025 (until June 10, 2025) within 52 June, it will be more than 5 June. (Until June 10) compared to May. 2025, largely due to a high base.