Cooling food prices keep rural inflation in check

Beginning March 2025, rural price rise has been lower than urban for the third month (up to May) in a row, latest data released by the National Statistics Office (NSO) showed.

- SHIVA RAJORA

Retail inflation in rural areas in May stood at 2.59 per cent, while in urban areas it was 3.07 per cent.

Earlier, starting July 2023, rural inflation led urban for 20 months straight, before falling below urban inflation for the first time in March this year.

Economists attribute the fall in rural inflation to the falling food prices which form the bulk of the weight in the rural index and a mild rise in core inflation, which has a higher weight in urban index.

Food items have a weight of 54 per cent in the rural index, while they only constitute 36 per cent in the urban index.

While overall food inflation fell to a 43-month low of 0.99 per cent in May from 1.78 per cent in April, food inflation in rural areas stood at 0.95 per cent.