Retail Inflation In May Set to Hit Six‑Year Low of Around 3%, Says Experts

India’s retail inflation for May 2025 is widely expected to ease to around 3 percent—its lowest level since April 2019, when the official Consumer Price Index (CPI) data is released this evening. A Reuters poll of 50 economists conducted between June 5 and 9 forecast a median reading of 3.00 per cent for May, down from April’s 3.16 per cent, which itself was a 69-month low.

Driven by a favorable base effect and softer food inflation, the CPI in May is likely to be at 2.7 per cent. The last time CPI dipped below 3 per cent was April 2019, when it stood at 2.99 percent.

April’s CPI print of 3.16 per cent had surprised markets by coming in nearly a full percentage point below January’s 4.06  per cent. The slide in April was driven largely by declining vegetable prices: on a year-on-year basis in May, tomato prices plunged 29 percent, onion prices fell 15 percent, and potato prices dropped 16 pe rcent, according to CRISIL’s Monthly Indicator of Food Plate Cost. Sequentially, however, tomato and potato prices rose 10 percent and 3 percent, respectively, while onions eased further by 10 percent.

All eyes are now on India’s early but uneven monsoon: after an early onset, rainfall slowed post-May 29 before the India Meteorological Department (IMD) forecast a revival starting Thursday. Adequate and well-distributed rains will be critical to sustaining food-price moderation in the coming months.

On June 6, the Reserve Bank of India (RBI) surprised markets by cutting its key policy rate by 50 basis points—double the expected 25-point move—and shifting its stance from “accommodative” to “neutral.” Governor Shaktikanta Das cited persistently subdued inflation as justification for the rate cut, aiming to bolster economic growth. A snap poll following the RBI decision indicated that the easing cycle is now likely complete.

The CPI release will test whether retail inflation is truly on track to remain within the RBI’s medium-term target band of 2–6 per cent. A print below 3 per cent would mark the first sub‑3 per cent CPI reading in over six years, offering relief to consumers and reinforcing the central bank’s recent policy pivot.

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