India's Retail Inflation Remains Below Target at 3.93% in May

In May 2023, India's retail inflation was recorded at 3.93%, slightly up from April's 3.48%. This figure remains below the Reserve Bank of India's target of 4%. The rise in inflation is attributed to elevated crude oil prices and geopolitical tensions in West Asia. The RBI has revised its inflation forecast for FY27 to 5.1%, citing risks from potential monsoon deficits and global energy prices. Despite these pressures, India's GDP growth remains strong, with a 7.8% increase in the fourth quarter. Food prices continue to significantly impact overall inflation rates.

By Narendra Chaudhary Jun 12, 2026, 17:26 IST

Retail Inflation Update

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New Delhi, June 12: According to provisional data from the Ministry of Statistics and Programme Implementation, India's retail inflation for May was recorded at 3.93%, remaining below the Reserve Bank of India's medium-term target of 4%.

This figure shows a slight increase from the 3.48% noted in April. However, comparisons with the same period last year are not feasible due to the rebasing of the Consumer Price Index (CPI) basket, which now uses 2024 as its base year.

The updated series was launched in January, reflecting consumption patterns identified in the 2023-24 Household Consumption Expenditure Survey.

The ongoing rise in inflation indicates that price pressures are beginning to surface after a relatively stable start to the year.

Economists attribute the concerns over imported inflation to high crude oil prices and persistent geopolitical tensions in West Asia.

In its June monetary policy review, the RBI adjusted its inflation forecast for FY27 to 5.1%, up from the previous estimate of 4.6%, citing risks associated with a potentially subpar monsoon due to El Nino and rising global energy costs.

The central bank decided to keep the benchmark repo rate steady at 5.25% on June 5. The six-member Monetary Policy Committee unanimously agreed to maintain the current stance, indicating a cautious approach as they evaluate the effects of increasing oil prices and global uncertainties on the domestic economy.

The ongoing conflict in West Asia has further pressured the Indian economy, impacting currency markets and raising concerns about stagflation.

Despite these challenges, India's economic growth has shown resilience, with GDP growth recorded at 7.8% in the fourth quarter and 7.7% for the entire FY26.

Food prices are a significant factor in determining overall inflation, given their substantial weight in the CPI basket.

Since June 2025, food inflation has remained negative, contributing to historically low overall retail inflation rates.

In October of the previous year, headline CPI inflation dropped to a record low of 0.25%, aided by food inflation of minus 5.02%.