Wholesale inflation in May cools to 5-month low of 2.17%

Wholesale inflation in May cools to 5-month low of 2.17%
After a lower consumer inflation in May, the wholesale prices too fell a five-month low at 2.17% backed by cheaper food and vegetable prices.

A government data showed prices of food items declined 2.27% in May while vegetable prices declined more than 18%. Potato prices slipped more than 44% and onion too went down close to 13%.

Protein items such as eggs, meat and fish also declined over 1% year-on-year in May. Only cereals in the food basket saw an uptick in prices. Pulses got cheaper.

The new figures are based on the base year 2011-12. The base year was revised last month in order to reflect numbers more accurately.

There was deflation in the fruit basket to the tune (-)0.73%.

Commenting on the WPI based inflation numbers industry body Ficci said, “the trend in inflation is in line with the broad expectations - both wholesale and retail prices remain benign. Food inflation has softened considerably over the past couple of months. Further, with global commodity prices remaining subdued and the monsoon this year expected to be ‘normal’, inflation should continue to be within RBI’s comfort zone.”

“The central bank has revised downwards its own projection for inflation in the months ahead. I think the case for supporting growth is getting stronger and we hope that RBI will take a relook into its monetary policy stance in the light of these new numbers. We need to boost investments and growth, which is so essential for employment generation across the economy”.

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