India’s Inflation Hits Lowest Level to 2.82% Since 2019

In the month of May 2025, India’s Consumer Price Index (CPI) inflation eased to 2.82% in May 2025, marking its lowest YoY rate since February 2019, as per provisional data from the Ministry of Statistics & Programme Implementation. The inflation of 2.82% represents a fall of 34 basis points from April’s 3.16%, signalling continued economic resilience and price stability.

Food Inflation Sees Steep Decline

One of the most significant contributors to the overall decline was food inflation, which fell sharply to 0.99%, the lowest level since October 2021. This is a drop of 79 basis points from April’s 1.78%.

• Rural food inflation stood at 0.95%
• Urban food inflation registered 0.96%

The drop was primarily backed by reduced prices of essentials, including pulses, cereals, vegetables, fruits, eggs, sugar, and household goods. The moderation also benefited from a favourable base effect.

Rural vs. Urban Inflation Trends

• Rural headline inflation eased to 2.59% in May, down from 2.92% in April.
• Urban headline inflation dropped from 3.36% to 3.07%.
• Rural food inflation saw a notable dip from 1.85% to 0.95%, while urban food inflation declined from 1.64% to 0.96%.

Mixed Movements in Core Sectors

Other components of inflation showed varied trends:

• Housing (urban only): Increased slightly to 3.16% from 3.06%
• Education: Held steady at 4.12%
• Health: Marginally rose to 4.34%
• Transport and Communication: Climbed to 3.85% from 3.67%
• Fuel and Light: Eased to 2.78%, down from 2.92%

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State-Level Insights: Inflation Still High in a Few Regions

The National Statistical Office (NSO) gathered pricing data from 1,114 urban markets and 1,181 villages, achieving a 100% response rate in rural areas and 98.6% in urban markets.

States with the highest inflation in May 2025 included:

• Kerala: 6.46%
• Punjab: 5.21%
• Jammu & Kashmir: 4.55%

Despite these outliers, most states reported moderate inflation rates, contributing to the national decline.

Conclusion

The consistent downward trend in inflation, particularly in food prices, indicates effective policy measures and improved supply-side management. For millions of Indian households, this translates to greater affordability and economic relief, especially in rural regions where price sensitivity is higher.

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