India's retail inflation rate slightly decreased to 4.75% in May from 4.83% in April, below the 4.89% predicted by economists, as per government data released on Wednesday. This decline was influenced by falling fuel prices, although food prices remained high.

Swati Arora, an economist at HDFC Bank, noted that the moderation in inflation was primarily due to lower core inflation and a reduction in fuel inflation. Food inflation, which makes up nearly half of the consumer price basket, increased by 8.69% year-on-year in May, slightly down from April's 8.70%. Food prices have consistently risen by over 8% annually since November 2023.

Core inflation, excluding food and energy prices, decreased to 3.12% in May from 3.23% in April. The inflation rate for cereals was 8.69%, up from 8.63%, while pulses prices rose to 17.14% from 16.84%. Vegetable prices saw a minor decrease, rising 27.3% in May compared to 27.8% in April. Monthly, vegetable prices increased by 3.2% and pulses by 1.5%.

The cost of home-cooked vegetarian meals increased by 9% from the previous year due to rising onion, tomato, and potato prices, reported CRISIL.

Managing food prices is a priority for Prime Minister Narendra Modi, recently sworn in for a third term. The Reserve Bank of India (RBI) cautioned that a hot summer and low reservoir levels could impact summer crops, stressing the need to monitor pulses and vegetable supplies. High food prices have led the RBI to keep interest rates unchanged for eight consecutive meetings to achieve a sustainable 4% retail inflation rate. Economists predict the central bank will maintain current rates until the October-December period.