Capital Market has conducted a poll amongst economists across leading banks, rating agencies, financial advisories and brokerages forJune 2025 CPI inflation projections. The results of the poll as indicated by the median of CPI inflation forecasts from economists, shows that CPI inflation would moderate to 2.5% inJune 2025from 2.8% reading in May 2025.

The economists in the poll have projected the CPI inflation in the narrow range of 2.21% to2.5% forJune 2025. The median of various CPI inflation forecast received from economists stood at 2.4%, while the was also at 2.4% forJune 2025.

CPI Inflation: May2025

The all-India general CPI inflation declined to 2.82% in May 2025 (new base 2012=100), compared with 3.16% in April 2025. The corresponding provisional inflation rate for rural area was 2.59% and urban area 3.07% in May 2025 as against 2.92% and 3.36% in April 2025. The core CPI inflation increased to 4.28% in May 2025 compared with 4.23% in April 2025. The cumulative CPI inflation has eased to 2.99% in April-March FY2026 compared with 4.82% in April-March FY2025.

Among the CPI components, inflation of food and beverages declined to 1.50% in May 2025 from 2.14% in April 2025. Within the food items, the inflation for vegetables declined to (-) 13.70%, pulses and products (-) 8.22%, cereals and products 4.77% and fruits 12.74%. Further, the inflation for sugar and confectionery declined to 4.09%, prepared meals, snacks, sweets etc. 4.38%, meat and fish (-) 0.39% and egg 0.64%. However, the inflation for milk and products rose to 3.15%, spices (-) 2.82%, oils and fats 17.91% and non-alcoholic beverages 4.56% in May 2025.

The inflation for housing increased to 3.16%, while that for miscellaneous items rose to 5.06% in May 2025. Within the miscellaneous items, the inflation for personal care and effects increased to 13.49%, transport and communication 3.85% and health 4.34%, while the inflation for household goods and services declined to 2.00%, recreation and amusement 2.45% and education 4.12% in May 2025.

The inflation for clothing and footwear declined to 2.67%, while the CPI inflation of fuel and light eased to 2.78% in May 2025.

FAO Food Price Index: June 2025

The FAO Food Price Index, a benchmark for world food commodity prices rose 0.5% in June 2025 from May 2025. Although international prices of cereals and sugar fell, these declines were outweighed by higher prices for dairy products, meat and vegetable oils. The index was 5.8% higher compared to its level a year earlier but remained well below its peak in March 2022.

The FAO Cereal Price Index fell by 1.5% in June from the previous month. World maize prices declined sharply for the second month amid abundant supplies from Argentina and Brazil. Prices of sorghum and barley also decreased. Wheat prices, by contrast, increased due to weather-related concerns in parts of the European Union (EU), the Russian Federation and the United States of America (USA). International rice prices dipped slightly, primarily for Indica varieties, reflecting softer demand.

The FAO Vegetable Oil Price Index rose by 2.3% from May, led by gains in palm, soy and rapeseed oils. International palm oil prices climbed nearly 5% on strong global demand. Soy oil prices also rose in June driven by expectations of higher biofuel demand in Brazil and the USA, as well as higher soybean prices in South America amid firm international demand. Rapeseed oil prices also rose amid tight global supply outlooks, while sunflower oil prices eased on improved production prospects in the Black Sea region.

The FAO Meat Price Index increased by 2.1% in June, reaching a new all-time high. World prices of bovine, pig and ovine meats all rose, while poultry meat prices continued to fall.

The FAO Dairy Price Index rose by 0.5% in June compared to the previous month, with butter prices reaching a new record high amid tight supplies in Oceania and the EU, coupled with continued strong demand from Asia. Cheese prices increased for the third consecutive month, while the prices of skim and whole milk powders declined due to subdued global demand and ample supplies.

The FAO Sugar Price Index was down 5.2% from May, marking its fourth consecutive monthly decline and reaching its lowest level since April 2021. The decrease reflects improved production outlooks in Brazil, India and Thailand, where favourable weather and expanded plantings should result in higher outputs.

Outlook

The WPI inflation has declined sharply to 0.4%, while the CPI inflation has also slipped to more than six-year low of 2.8% in May 2025. The inflation has moderated driven by softening of prices for food items. The core inflation which is more sticky has also shown moderation. The inflation is expected to be well under control for next two-three quarters. The strong monsoon rainfall and pick up in kharif crop sowing augurs well for maintaining food price inflation under control. The weather-related uncertainties and still evolving tariff related concerns with impact on global commodity prices is a cause of concern for inflation. RBI has projected CPI inflation for the financial year 2025-26 at 3.7%, with Q1 at 2.9%, Q2 at 3.4%, Q3 at 3.9%; and Q4 at 4.4%.