India's wholesale inflation falls to 14-month low in May

India's wholesale inflation falls to 14-month low in May

India's wholesale inflation has hit a low of 0.39% in May, government data released on Monday showed.

The figure is a 14-month low, significantly lower than the 0.85% recorded in April, which was a five-month low.

The Wholesale Price Index (WPI)-based inflation rate also contracted sequentially to 0.06%, down from April's rate of 0.19%.

Inflation rates of various sectors

The inflation rate for manufactured goods, which accounts for over 60% of the wholesale inflation basket, stood at 2.04% in May.

On the other hand, primary articles inflation fell by 2.02%, a stark contrast to April's growth of 1.44%.

Fuel and power also saw a decline in their respective inflation rates with fuel and power witnessing a similar contraction at 2.27%.

Retail inflation also eases to near 6-year low

Along with wholesale inflation, India's retail inflation has also eased significantly.

The Consumer Price Index (CPI) dropped to a near six-year low of 2.82% in May.

This is mainly due to a sustained moderation in food inflation, which has fallen below 1% for the first time in nearly four years.

RBI has room to ease its monetary policy

The steady decline in both retail and wholesale inflation has given the Reserve Bank of India (RBI) room to ease its monetary policy.

The RBI's Monetary Policy Committee (MPC) announced a 50 basis points rate cut earlier this month, following similar cuts of 25 bps in February and April.

Now, the repo rate stands at 5.5%, a full percentage point lower than at the start of 2025.