Retail inflation falls to 4.75% in May, downward trend continues

The Ministry of Statistics and Programme Implementation (MoSPI) released the Consumer Price Index (CPI) numbers for May 2024, putting the year-on-year inflation rate for the country at 4.75 per cent (provisional).

According to the data, this figure is a marginal decline from the 4.83 percent recorded in April 2024 and much lower than the 4.31 percent recorded in May 2023.

The data shows differentiated inflation rates for rural and urban areas, with rural inflation standing at 5.28 per cent and urban inflation at 4.15 per cent.

These figures reflect a continuing trend of controlled inflation in urban areas, while the rate of price rise is higher in rural areas.

The overall CPI inflation for India in May 2024 is the lowest in May last year, reflecting the government's success in keeping inflation under control.

India has maintained the inflation rate below 6 percent since September 2023, underlining the effectiveness of economic policies and regulatory measures.

This stability is a significant achievement, especially in the face of global economic uncertainties and pressures.

Notably, some consumer categories have seen a change in inflation rates. The 'spices' category saw a significant decline in inflation compared to April 2024, indicating a reduction in price pressures for these items, the press release said.

Additionally, key consumer segments such as 'Clothing & Footwear', 'Housing' and 'Miscellaneous' have also witnessed a decline in inflation rate, leading to an overall moderation in price growth.

This trend indicates broad stabilization in the prices of various essential commodities and services.

The year-on-year inflation of the Consumer Food Price Index (CFPI) for May 2024 was 8.69 per cent, higher than the general CPI.

The figure reflects a significant increase in food prices, with rural CFPI at 8.62 per cent and urban CFPI at 8.83 per cent. High inflation in food prices, especially in urban areas, indicates that consumers are facing a considerable burden in terms of food costs.

This disparity between general and food inflation underlines the importance of targeted policy interventions to address the rising costs of essential food items.

The month-on-month changes in the CPI index also show a marginal increase. The press release said that from April to May 2024, the CPI general index saw a growth of 0.48 per cent, with the rural index increasing by 0.42 per cent and the urban index increasing by 0.49 per cent.

The CFPI index, which focuses on food prices, rose by 0.73 per cent during the same period, while the rural and urban indices rose by 0.69 per cent and 0.87 per cent, respectively.

These monthly changes reflect ongoing adjustments in the market, reflecting both seasonal and economic factors that influence price dynamics.

The CPI data collection process involved field operations covering 1114 urban markets and 1181 villages across the country. MoSPI reported a data collection rate of 100 per cent in villages and 98.5 per cent in urban markets for May 2024.

The wide coverage and high accuracy rate underline the reliability of the reported CPI numbers, and ensure that they accurately reflect the price changes experienced by consumers across different regions of India.

Looking ahead, the next CPI release for June 2024 is scheduled on July 12, 2024. This upcoming report will provide further insight into inflation trends and economic conditions in India.