The lowest inflation in 25 months - a big relief to the general public

Inflation In India: The biggest news is coming regarding retail inflation. On the inflation front, for the third consecutive month, the government and the common people have received news of relief. According to the data, the retail inflation has come down to 4.25 percent in the month of May. Which is the least seen after April 2021. The same figure was 4.70 per cent in the month of April and came down to 5.7 per cent in the month of March. This clearly means that inflation has seen a decline for the third consecutive month and since February, a decline of 205 basis points has been seen. If experts are to be believed, the inflation figures will depend on the monsoon in the coming days. This time El Nino can also be seen on the agriculture sector.

Food inflation also declined

If we talk about food inflation, then there has been a decline in it in the month of May. Food inflation was at 3.84 per cent in the month of April, which has come down to 2.91 per cent in May. Rural inflation was 4.17 percent while urban inflation was 4.27 percent. Apart from the base effect, such numbers are being seen due to the reduction in the prices of food and fuel. Apart from low energy prices, softening prices of cereals and vegetables have also brought down the inflation level. Due to the sharp fall in the international prices of LPG and Kerosene, fuel inflation has come down significantly in the month of May.

What has been estimated by RBI?

In the monetary policy meeting, RBI has kept the inflation forecast below 5 percent in the first quarter of the financial year. This means that according to RBI, retail inflation in the first quarter can remain at 4.6 percent. In the later quarters, the rate of retail inflation can be more than 5 percent. Talking about the figures, retail inflation has been estimated at 5.2 per cent in the second quarter, 5.4 per cent in the third quarter and 5.2 per cent in the fourth quarter. By the way, the estimate for the entire financial year has been made at 5.1 percent. RBI Governor Shaktikanta Das says that this time the target of RBI is estimated to be more than 4 percent inflation.

RBI's repo rate stable

The Reserve Bank has kept the repo rate constant for the second consecutive month in the RBI MPC meeting held this month. At present, the repo rate of RBI is 6.50 percent. The last time the repo rate was increased by 0.25 percent in the month of February. From May 2022 to February 2023, the repo rate has increased by 2.50 percent. According to experts, till the end of this year, RBI will not make any change in the repo rate. On the other hand, some experts believe that if inflation manages to come down to 4 per cent by August, then interest rates can be increased from 0.15 per cent to 0.25 per cent in the August rate cycle.

IIP data

India's industrial production ie IIP has increased at a rate of 4.2 per cent in April this year. According to the official data released on Monday, the index of industrial production had increased by 6.7 percent in April 2022. According to NSO data, in April 2023, manufacturing sector production has increased by 4.9 percent and mining production by 5.1 percent. At the same time, there has been a decline of 1.1 percent in electricity production.