The Consumer Price Index (CPI) itself is an index number that reflects the average change over time in the prices paid by consumers for a basket of goods and services. While the specific CPI index number for May 2024 is a detailed data point typically released by statistical agencies, the most commonly reported and significant figure derived from it is the year-on-year inflation rate.
For May 2024, the year-on-year inflation rate based on the all-India Consumer Price Index (CPI) number stood at 4.75% (Provisional). This figure indicates the percentage increase in the average price level of goods and services consumed by households compared to May 2023.
Key Inflation Rates for May 2024
The inflation rates based on the General CPI vary across different regions, providing a more detailed picture of price changes experienced by rural and urban populations.
| Region | Year-on-Year CPI Inflation Rate (Provisional) |
|---|---|
| All India | 4.75% |
| Rural | 5.28% |
| Urban | 4.15% |
Notably, the all-India inflation based on the General CPI for May 2024 represents the lowest rate recorded since May 2023, signaling a moderation in the pace of consumer price increases over the past year.
Understanding CPI and Its Significance
The Consumer Price Index is a vital economic indicator used for several purposes:
- Economic Policy: Central banks and governments utilize CPI data to inform monetary and fiscal policies, aiming to manage inflation and maintain economic stability.
- Purchasing Power: It helps individuals and organizations understand changes in the purchasing power of money over time.
- Wage and Benefit Adjustments: CPI data is often used in wage negotiations, pension adjustments, and social security benefit calculations to ensure that real incomes are maintained.
- Investment Decisions: Investors monitor CPI to gauge the impact of inflation on returns and to make informed decisions about various asset classes.
The reported inflation rate provides a clear measure of how much prices have risen over a 12-month period, offering valuable insight into the cost of living and the broader economic environment.
