CPI (provisional) grows slowly by 3.93% Y-o-Y in May 2026, despite mounting pressures of supply chain disruptions, says PHDCCI

New Delhi, June 12, 2026: India's retail inflation, measured by the Consumer Price Index (CPI), stood at 3.93% in May 2026 (year-on-year), remaining below the Reserve Bank of India's medium-term target of 4% despite a modest increase from 3.48% in April 2026. The latest data indicate that inflation remains broadly contained, supported by moderation in several core consumption categories.
Food inflation (year-on-year) rose to 4.78% in May from 4.20% in April, driven primarily by higher prices of tomatoes, ginger, and certain dry fruits. However, substantial declines in prices of potatoes, peas, and selected consumer durables helped moderate overall inflationary pressures.
“The moderation of headline retail inflation below 4 per cent reflects the resilience of India's macroeconomic fundamentals and the effectiveness of ongoing efforts to maintain price stability. While food prices remain subject to seasonal fluctuations, inflation across broad level continues to remain contained, supporting household purchasing power Rajeev Juneja, President, PHDCCI”
While Kharif crops such as tomato and Ginger show high inflation rates in May 2026 (48.93% and 32.49% respectively), the prices of Motor car and Jeep and Motor cycle and scooter has shown a stark decline (-7.19% and -3.56% y-o-y deflation) in the same time period.
Rural inflation increased to 4.25%, while urban inflation stood at 3.53%, reflecting relatively stronger food price pressures in rural areas. Housing inflation remained subdued at 2.12%, while transport inflation was contained at 1.75%, contributing to overall macroeconomic stability, he added.
Inflation remained elevated in personal care and miscellaneous services, restaurants and accommodation services, and food and beverages. While food-price volatility continues to necessitate close monitoring.
Continued improvement in supply chains, stable energy prices, and favourable domestic economic conditions are expected to support inflation management efforts in the coming months. Brent Crude prices have fallen below US$90 per barrel in early morning trade which will support lower inflation numbers.
“The short term inflation outlook looks benign due to continued vigilance by the government on food-price developments, coupled with favourable agricultural production, improving supply conditions, and stable macroeconomic policies. Sustained price stability will remain important for supporting investment, consumption, and India's medium-term growth trajectory said Dr. Ranjeet Mehta, SG & CEO, PHDCCI.