Page 16 - Policy & Economic Report - June 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

• The significant decline in headline inflation and food inflation during the month of May, 2025 is
mainly attributed to decline in inflation of Pulses & products, Vegetables, Fruits, Cereals &
products, Households goods & services, Sugar & confectionary and Egg and the favorable base
effect.

• Rural Inflation: Significant decline in headline and food inflation in rural sector observed in May,
2025. The headline inflation is 2.59% (provisional) in May, 2025 while the same was 2.92% in April,
2025. The CFPI based food inflation in rural sector is observed as 0.95% in May, 2025 in
comparison to 1.85% in April, 2025.

• Urban Inflation: Significant decline from 3.36% in April, 2025 to 3.07% (Provisional) in May, 2025
is observed in headline inflation of urban sector. Sharp decline is also observed in food inflation
from 1.64% in April, 2025 to 0.96% (Provisional) in May, 2025.

• Housing Inflation: Year-on-year Housing inflation rate for the month of May, 2025 is 3.16%
(Provisional). Corresponding inflation rate for the month of April, 2025 was 3.06%. The housing
index is compiled for urban sector only.

• Fuel & light: Year-on-year Fuel & light inflation rate for the month of May, 2025 is
2.78%(Provisional). Corresponding inflation rate for the month of April, 2025 was 2.92%. It is
combined inflation rate for both rural and urban sector.

• Top five major states with high Year on Year inflation for the month of May, 2025 are shown in
the graph below.

Figure 9: All India inflation rates for CPI (General) and CFPI

June 2025 Source- NSO

According to the monetary policy meeting, record wheat production and higher production of key pulses
in the Rabi crop season, and expected above normal monsoon along with its early onset augurs well for
Kharif crop prospects should ensure adequate supply of key food items. Reflecting this, inflation
expectations are showing a moderating trend, more so for the rural households.

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