Common people in India have got double happiness about inflation. Earlier there was a big decline in wholesale inflation, which has come in minus. At the same time, retail inflation has seen a decline of 72 basis points and has come to 2 percent. Inflation in June was the lowest in 78 months. According to the government report, due to the reduction in food prices and favorable base effects on Monday, India’s retail inflation came to the lower level of 2.10 per cent of more than six years in June. This is the fifth consecutive month when inflation has been below 4 per cent of the Medium -term target of the Reserve Bank of India (RBI) and is a consecutive month when it has been under the Central Bank’s upper tolerance band of 6 per cent.
Inflation at 78 months lower level
The report said that the core inflation of June 2025 has declined by 72 basis points compared to May 2025. This is the lowest inflation since January 2019. June was also the second consecutive month when inflation was below 3 per cent. Retail inflation was 2.82 percent in May and less than 5.08 percent in June 2024. A survey by 50 economists of Reuters was estimated to be reduced by 2.50 fifty of retail inflation in June. If we talk about food inflation, then it was reduced to -1.06 percent in June, which was 0.99 percent in May. This decline was mainly due to favorable base effects and low prices in major categories such as vegetables, pulses, meat and fish, grains, sugar, milk and spices. Inflation for rural and urban areas is -0.92 percent and -1.22 percent respectively. According to the report, in June 2025, food inflation has been the lowest after January 2019.
RBI’s inflation estimate
These figures have come a month after RBI’s MPC cut the repo rate by 50 basis points to 5.5 per cent, which is the third consecutive cut this year. The policy stance was “neutral” to indicate a more balanced approach towards development and inflation in future. For FY 2026, the Central Bank has reduced its 4 per cent CPI inflation forecast in April to 3.70 per cent. Now according to quarter-wise data, RBI had estimated 2.9 per cent in the first quarter, 3.4 per cent in the second quarter, 3.5 per cent in the third quarter and 4.4 per cent in the fourth quarter.
According to MPC, inflation has come down significantly since crossing the tolerance band at the end of 2024, but there has been a lot of monitoring on global uncertainties and the risks of the supply side. Nevertheless, the RBI had said that the forecast of inflation is “equally balanced” and the price pressure is expected to decrease further in the coming months. After the announcement of his repo rate, RBI Governor Sanjay Malhotra said that there has been a significant decrease in inflation in the last six months.