The rise in retail inflation was primarily as a result of rise in meals costs, with Shopper Meals Worth Index (CFPI) inflation in Might 2026 at 4.8%, a gradual improve from 4.2% within the earlier month. |Photograph courtesy: Getty Pictures/iStockphoto
Retail inflation, as measured by the Shopper Worth Index (CPI), rose to three.9% in Might on the again of upper meals costs, in line with Ministry of Statistics and Program Implementation (MoSPI) information launched on Friday, June 12, 2026. The inflation fee in April was 3.5%.
Retail costs moved on the quickest tempo since January 2025, when the index rose 4.06%, and the Might numbers have been the very best in 16 months.
The headline numbers had been declining since October 2024, when the inflation fee exceeded 6%. By October 2025, it had almost stagnated. From November 2025 onwards, retail inflation began to rise from a low base and is now simply 0.07% wanting the Reserve Financial institution of India’s (RBI) goal inflation fee of 4%.
Bigger print was noticed in each headline and core inflation. The latter additionally rose to three.73%, marking the third consecutive month of accelerated value development. Headline inflation covers all items and providers, whereas core inflation is calculated with out making an allowance for the costs of meals, gas, and electrical energy.
The rise in retail inflation was primarily as a result of rise in meals costs, with Shopper Meals Worth Index (CFPI) inflation in Might 2026 at 4.8%, a gradual improve from 4.2% within the earlier month.
Some staples skilled greater inflation charges and decrease deflation charges. Grain costs rose 0.28%, coming into optimistic territory for the primary time since January 2026. A lot of the improve got here from rice, which rose 0.23% after remaining in deflationary territory for the reason that starting of the 12 months.
Amongst kitchen necessities, tomato costs rose by 48.4% in Might 2026 from 35.3% within the earlier month, breaking a four-month development of slowing inflation. The speed of decline in onion costs slowed to 2.2% within the reporting month from 17.7% in April 2026. Potato costs confirmed no important indicators of rising, persevering with to say no by 23% for the second month in a row.
“The monsoon is already late and the recommendation given to farmers was to attend for rains earlier than sowing associated crops,” stated Madan Sabnavis, chief economist at Financial institution of Baroda.
Inflation for housing, water, electrical energy, gasoline and different fuels, the second largest group of things comprising 17.6% of the retail basket, accelerated to 1.73% in Might 2026 from 1.71% within the earlier month. LPG and different classes slowed for the third consecutive month to 2.02% from over 5% in March 2026. Gasoline and diesel inflation rose to six% in Might 2026 from 2.8% in April 2026 and simply 0.5% in March 2026, demonstrating the spillover of gas prices. Nevertheless, gas inflation remained above February’s degree of 1.7%.
Rising gas costs are additionally mirrored in inflation in transportation items. Transportation prices, which had been slowly shrinking or stagnant since January 2026, elevated by 1.75% in Might 2026, primarily as a result of greater logistics costs as a result of struggle in West Asia.
The inflation fee in Might 2026 was roughly consistent with economists’ expectations. Moreover, economists predict that price transmission from the West Asian wars will improve the worth of retail items in June 2026. Annual CPI inflation is predicted to be between 5% and 5.5%, with a possible fee hike within the October 2026 or December 2026 financial coverage evaluate. Along with influences from West Asia, analysts are additionally monitoring a weaker-than-normal monsoon related to El Niño.
