Wholesale price-based inflation hit a 22-month low of 2.45% in May on falling prices of food articles, fuel and power items.
The Wholesale Price Index (WPI)-based inflation was at 3.07% in April this year. It was 4.78% in May 2018.
Inflation in the food articles basket was 6.99% in May 2019, down from 7.37% in April, official data released on Friday said.
However, onion prices spiked during the month with inflation at 15.89%, as against (-) 3.43% in April. Inflation in pulses continued in double digit for the fourth consecutive month at 18.36% in May, up from 14.32% in the previous month.
WPI inflation in May is the lowest in 22 months, since July 2017, when it was at 1.88%. India Ratings & Research principal economist Sunil Kumar Sinha said the core inflation at 1.2% is 29 months’ low in May 2019.
“This is clearly an indication of weakening of demand impulse in the economy. Dwindling auto and FMCG sales growth has been pointing towards this for past several months.”
The delayed and less than normal monsoon could aggravate the food inflation further in the coming months lest the government monitors the situation proactively, checks speculative activities, and intervenes in the market to stabilise prices, he added.
Vegetables inflation eased to 33.15% in May, down from 40.65% in the previous month. Inflation in potato was (-) 23.36%, against (-) 17.15% in April.
Inflation in ‘fuel and power’ category cooled to 0.98% from 3.84% last month on account of softening global crude oil prices.
Manufactured items too saw decline in prices with inflation at 1.28% in May, against 1.72% in April.