Inflation in India falls to 2-Year Low Rate; Drops to 4.25% in May 2023, Driven by Declining Food Prices

June 14, 2023

CONSUMER PRICE INDEX NUMBERS ON BASE 2012=100 FOR RURAL, URBAN AND COMBINED FOR THE MONTH OF MAY 2023

The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) is releasing 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 (Provisional) in this press note. CPIs for Sub-Groups and Groups for both All India and all States/UTs are also being released.

2. The price data are collected from selected 1114 urban Markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a
weekly roster. During the month of May 2023, NSO collected prices from 98.56 % villages and 97.04% urban Markets while the Market-wise prices reported therein were 88.56% for rural and 90.76% for urban.

The annual inflation rate in India fell to 4.25% in May of 2023 from 4.7% in the previous month, the lowest since April 2021 and firmly below market forecasts of 4.42% amid a fresh slowdown in inflation for food. The result drove inflation closer to the RBI’s target of 4% and extended the decline past the central bank’s upper limit of 6%, paring concerns of an eventual resumption of its tightening cycle. Consumer food inflation fell to 2.91% from 3.84% in the previous month, amid significant deflation for oils and fats (-16.01% vs -12.33% in April), vegetables (-8.18% vs -6.5%), and meat and fish (-1.29% vs -1.23%). In the meantime, inflation slowed for transport and communication (1.1% vs 1.17%), housing (4.84% vs 4.91%), and fuel and light (4.64% vs 5.52%). On a monthly basis, consumer prices rose at a steady pace from the previous month at 0.51%.

Source: Ministry of Statistics and Programme Implementation (MOSPI) & TradingEconomics
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