Daijiworld Media Network – New Delhi

New Delhi, Jun 13: India’s retail inflation dropped to a 75-month low of 2.82% in May 2025, offering major relief to households as food inflation cooled to just 0.99%.

The data, shared by Infoindata and confirmed by the Ministry of Statistics, marks the lowest retail inflation since February 2019. The decline is being seen as a significant milestone for the Modi government, which has maintained a tight check on inflation over the past decade, unlike the UPA era marked by frequent double-digit spikes.

A strong agricultural yield has helped bring down prices of essential food items such as pulses, vegetables, cereals, sugar, eggs and fruits. Easing global crude prices have also played a key role in reducing fuel-related inflation.

For the seventh month in a row, food inflation has been on a steady decline, reaching its lowest level since October 2021.

Reacting to the figures, RBI Governor Sanjay Malhotra said the drop in prices signals a broad-based improvement. The Reserve Bank has now revised its inflation forecast for FY2025-26 from 4% to 3.7%, with CPI projections at 2.9% for Q1, 3.4% for Q2, 3.9% for Q3 and 4.4% for Q4.

The RBI also announced a surprise 50 bps cut in the repo rate, bringing it down to 5.5%, along with a 100 bps reduction in cash reserve ratio across four tranches — a move set to infuse Rs 2.5 lac cr into the banking system and boost credit flow.