Inflation in food articles during May stood
at 1.13 per cent, as against 2.55 per cent in April.
Prices in the wholesale
market fell to a 4.5-year low level in May, recording a deflation of 3.21 per
cent, due to sharp decline in fuel and power items even as food articles turned
expensive.
The Wholesale Price
Index (WPI) has hit its lowest level since November 2015, when deflation was 3.7
per cent.
"The
annual rate of inflation, based on monthly WPI, stood at (-3.21 per cent)
(provisional) for the month of May, 2020 as compared to 2.79 per cent during
the corresponding month of the previous year," the commerce and industry
ministry said in a statement on Monday.
However, inflation in food articles during May stood at
1.13 per cent, as against 2.55 per cent in April.
WPI inflation in pulses
continued to remain in double digits at 11.91 per cent, against 12.31 per cent
in April.

Inflation in protein-rich items like egg, meat and fish
was 1.94 per cent in May.
Data collected by the government at the retail level,
which was released last week, showed a year-on-year rise in food inflation at
9.28 per cent in May, led by pulses, meat and fish, and oils and fats.
In fuel and power basket, deflation stood at 19.83 per
cent in May, as against 10.12 per cent in the previous month.
Manufactured products too witnessed deflation of 0.42 per
cent during the month.
Due to the nationwide lockdown imposed on March 25, the
ministry had released truncated WPI inflation data for the month of April, with
figures of food, primary articles and fuel and power.
However, it has advised its field offices to collect
price data through electronic means and the final index for the month would be
released next month.
"Price data is collected from selected institutional
sources and industrial establishments spread across the country online through
web based portal maintained by the National Informatics Centre (NIC)," the
ministry said.
The final print of March WPI inflation stood at 0.42 per
cent as compared to its provisional levels of 1 per cent reported on April 14,
2020, the ministry said.
ICRA principal economist Aditi Nayar said, while the rise
in prices of some commodities like crude oil, may arrest the fall in the WPI
going ahead, easing food price pressure portend a welcome moderation in retail
food inflation.
The minutes of the Monetary
Policy Committee's (MPC) last meeting revealed a considerable degree of alarm
from some of its members, she said.
“Accordingly, we expect the
MPC to continue to prioritise alleviating the pain caused by the fall in economic
activity, over management of inflation that will almost certainly turn out to
be moderate in the near term.
“Therefore, we expect
another 25 bps cut in the repo rate, whenever the MPC chooses to meet
next," Nayar said.
The Reserve Bank last month
cut policy rates by 0.40 per cent, taking the key repo rate to its lowest ever
4 per cent.
As per the minutes of the
meeting of monetary policy committee, RBI Governor Shaktikanta Das underlined
the need to ease financing conditions for reviving consumption and revitalising
investment once the coronavirus-induced lockdown is lifted.
Tags
Business