Food cost easing, WPI inflation dips to seven-year low of -3.48% in May

New Delhi, June 14

The wholesale price-based inflation rate fell to a seven-and-a-half-year low of (-) 3.48 per cent in May on easing prices of food, fuel and manufactured items, strengthening the case for the RBI to continue with the rate hike pause in the current fiscal.

This is the second straight month when the WPI has been in the negative zone. Food prices also eased during May. A negative WPI inflation, technically termed as deflation, means that overall wholesale prices have been falling year-on-year. This is the lowest WPI inflation since November 2015, when it was

(-) 3.7 per cent. In May 2022, WPI was at 16.63 per cent. Last month, it was (-) 0.92 per cent.

Another reason was the high base effect as WPI-based inflation in May was 16.63 per cent. On Monday, the National Statistical Office had reported that data retail inflation had eased in May to 4.25 per cent, which is a 25-month low. Inflation in food articles eased to 1.51 per cent in May from 3.54 per cent in April. Fuel and power basket inflation eased to (-) 9.17 per cent from 0.93 per cent and in manufactured products, the rate stood at (-) 2.97 per cent in May against (-) 2.42 per cent in April.