WPI Inflation at Nearly 2-Year Low at 2.45 Percent in May

The Wholesale Price Index (WPI)-based inflation was at 3.07 percent in April. It was 4.78 percent in May 2018.

(Photo: Reuters)

Wholesale price-based inflation slipped to 22-month low at 2.45 percent in May, helped by falling prices of food articles, fuel and power items, according to official data released Friday, 14 June.

The Wholesale Price Index (WPI)-based inflation was at 3.07 percent in April. It was 4.78 percent in May 2018.

Inflation in food articles basket was 6.99 percent, down from 7.37 percent in April.

However, onion prices spiked during the month with inflation at 15.89 per cent, as against (-) 3.43 percent in April.

Vegetables inflation eased to 33.15 percent in May, down from 40.65 percent in the previous month. Inflation in potato was (-) 23.36 percent, as against (-) 17.15 percent in April.

WPI inflation in May is the lowest in 22 months, since July 2017, when it was at 1.88 percent Inflation in 'fuel and power' category cooled to 0.98 percent, from 3.84 percent last month. Manufactured items too saw decline in prices with inflation at 1.28 percent in May, against 1.72 percent in April.

WPI inflation data for March has been revised downwards to 3.10 percent from provisional 3.18 percent.

Data released earlier this week showed retail inflation spiked to a 7-month high of 3.05 percent in May on costlier vegetables, and protein-rich items.

The Reserve Bank of India, which mainly factors in retail inflation for monetary policy decision, on 6 June, lowered its benchmark lending rate to a nearly 9-year low of 5.75 percent, even as it upped its inflation projection to 3-3.1 percent for the first half of 2019-20.

Flagging uncertain monsoon, unseasonal spike in vegetable prices, crude oil prices, financial market volatility and fiscal scenario as risks to inflation, the RBI projected upward bias in food inflation in near term.