June 12th 2024.
New Delhi: Good news for consumers as the latest government data released on Wednesday shows a drop in retail inflation, reaching a one-year low of 4.75% in May. This is a slight decrease compared to the previous months, with the Consumer Price Index (CPI) based inflation at 4.83% in April 2024 and 4.31% in May 2023.
The decline in inflation can be attributed to a decrease in prices of certain kitchen items. The data released by the National Statistical Office also reveals that inflation in the food basket has marginally decreased from 8.70% in April to 8.69% in May.
It is worth noting that headline inflation has been on a downward trend since February 2024, with a slight variation between 5.1% in February and 4.8% in April. The government has set a target for the Reserve Bank to maintain the CPI inflation at 4% with a margin of 2% on either side.
In line with this, the Reserve Bank had previously projected the CPI inflation for 2024-25 at 4.5%, with the first quarter at 4.9%, second quarter at 3.8%, third quarter at 4.6%, and fourth quarter at 4.5%. The central bank takes into account the retail inflation while determining its bi-monthly monetary policy.
This drop in inflation is a positive sign for the economy and consumers as it means a decrease in the overall cost of living. The government and the Reserve Bank will continue to monitor and ensure that inflation remains at a manageable level for the benefit of the public. This is a promising trend that we hope will continue in the coming months.
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