May 2025 Inflation: Retail at 75-Month Low of 2.8%
Why in the news
May 2025 inflation surprised on the downside, helped by cheaper food, crude oil and natural gas. Geopolitics and weather could still undo the gains.
Key facts
| Measure | May 2025 |
|---|---|
| Retail (CPI) inflation | 2.8%, a 75-month low |
| Wholesale inflation | 0.4%, lowest in over a year |
| Oil and gas prices | Down 12.4% |
- Retail inflation eased on a broad-based fall in food prices.
- Global oversupply and weak demand pushed oil and gas lower; India imports nearly 80% of its crude, so wholesale prices felt it.
RBI update
- The policy review revised the annual inflation forecast to 3.7% from 4% earlier.
- RBI moved its stance to neutral, leaving room to hike or cut depending on inflation.
Risks ahead
- Israel-Iran tension: oil jumped 8% in a day after Israel struck Iran on 13 June; trouble in the Strait of Hormuz could hit supplies from Iraq, Saudi Arabia and the UAE.
- Monsoon: slow initial progress raised worry; uneven spread can leave key farm belts dry even if the total is normal, risking a rebound in food prices.
Exam angle
- Retail low: 2.8% (75-month low).
- Wholesale inflation: 0.4%.
- RBI stance: neutral; FY forecast 3.7%.