Wholesale inflation slips to 2.1 pct in May as food prices crash

Wholesale inflation or Wholesale Price Index (WPI) are set to be announced on June 14, 2017, and analysts expect it to drop following the higher than expected fall in retail inflation or CPI.

Official data released on Monday showed that retail - or consumer price indexed (CPI) - inflation during May also fell to 2.18 per cent, as compared with 5.76 per cent in the same month of a year ago, pulled down by sharp fall in food prices.

Build up inflation rate in the financial year so far was -0.35 percent compared to a build up rate of 2.51 percent in the corresponding period of the previous year.

Subsequently, prices of important crops like potato, vegetable, pulses, and onions have seen steep drops.

Prices potato plummeted almost (-) 44.36 percent in May, as against a growth 83.98 percent last year, while that of food articles fell (-) 2.27 percent from 6.82 percent the year before.

WPI is now based on the new base year 2011-12, which was revised last month from 2004-05, with an aim to reflect the macroeconomic picture more accurately.

The inflation print for vegetables read (-) 18.51 percent. Protein-rich pulses turned cheaper in May as prices fell by 19.73 per cent.

India Inc. on Wednesday called for an easing of the monetary policy in line with last month's deceleration in the country's annual rate of inflation based on wholesale prices. "We hope RBI will take a relook into its monetary policy stance in the light of these new numbers".

The rate of price increase was 4.15 % in cereals, down from 6.67 % in May a year ago.

While the revised WPI series will continue to comprise of three major groups namely primary articles, fuel & power and manufactured products, as was in the previous series, the weight of each these categories has been altered in the revised series.

Fuel, power, lighting prices rose 11.69 percent.

Wholesale price index rises 2.17% in May from a year earlier, compared with a median estimate of 2.9% in a Bloomberg survey of economists.

This is published unedited from the PTI feed.

  • Zachary Reyes