Inflation Rate Projected to Rise to 4% in May

09-Jun-2026 08:43 PM

New Delhi: The Reserve Bank of India (RBI) has set a medium-term retail inflation target of 4 percent, and the inflation rate based on the Consumer Price Index (CPI) is projected to reach this level in May 2026.

Leading economists attribute the rise in the inflation rate in May to a combination of domestic and global factors. Retail inflation rose due to increases in the prices of petrol, diesel, and food items.

The hike in prices—totaling ₹7.35 per litre for petrol and ₹7.53 per litre for diesel—led to increased transportation costs for goods. Interestingly, the inflation rate based on the Wholesale Price Index (WPI) had surged to 8.30 percent in April, marking a 42-month high.

In contrast, the retail inflation rate had risen by only 3.48 percent. While it stood at 3.03 percent in May 2025, it is expected to rise to a 16-month high in May 2026. Significant price increases were recorded for edible oils and tomatoes.