AI Generated Summary
- In its statement, the agency noted, “Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of June 2025 over June 2024 is 2.
- The sharp fall in inflation is likely to influence monetary policy discussions at the Reserve Bank of India (RBI), which has been maintaining a cautious stance amid global economic uncertainties.
- The NSO, operating under the Ministry of Statistics and Programme Implementation, attributed the sharp fall to a combination of favorable base effects and declining food prices.
India’s retail inflation eased sharply to 2.1% in June 2025, marking its lowest level in over six years, according to the latest data released by the National Statistics Office (NSO) on Monday. The last time inflation dipped this low was in January 2019, when it stood at 1.97%.
The June figure represents a significant decline from 2.82% in May 2025 and is less than half of the 5.08% recorded in June 2024, highlighting a steady cooling of price pressures in the economy.
The NSO, operating under the Ministry of Statistics and Programme Implementation, attributed the sharp fall to a combination of favorable base effects and declining food prices. In its statement, the agency noted, “Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of June 2025 over June 2024 is 2.10% (provisional). There is a decline of 72 basis points compared to May 2025, making it the lowest year-on-year inflation rate since January 2019.”
Food Prices Drive Decline
Much of the moderation in retail inflation has been driven by a notable fall in food inflation. Prices of key household staples such as vegetables, pulses, cereals, meat, fish, milk, sugar, and spices saw a considerable drop, providing relief to consumers after months of fluctuating food costs.
Economists suggest that a strong base effect from last year, along with improved supply chains and stable commodity prices, have contributed to the downward trend.
Implications for Policy and Consumers
The sharp fall in inflation is likely to influence monetary policy discussions at the Reserve Bank of India (RBI), which has been maintaining a cautious stance amid global economic uncertainties. Lower inflation could open the door for possible interest rate cuts, aimed at boosting growth.
For ordinary citizens, the decline comes as welcome news, as household budgets may face less pressure from rising prices in the coming months if the trend persists.
Whether this disinflationary trend continues will depend on monsoon performance, global commodity prices, and domestic demand in the coming quarters.
