By The Sampadak Express
India’s wholesale inflation eased to a 14-month low of 0.39% in May, down from 0.85% in April, according to government data released on Monday. The sharp moderation in prices of key kitchen essentials such as vegetables, onions, pulses, and cereals played a significant role in cooling wholesale inflation.
The wholesale food price inflation dropped to 1.72% in May from 2.55% a month earlier, offering some relief to consumers amid fluctuating commodity prices. Notably, vegetable prices saw a steep decline, with inflation contracting 21.62% compared to an 18.26% drop in April. Onion inflation also moderated sharply to 14.41% in May from 0.20% the previous month. Meanwhile, potato prices fell further, registering a deflation of 29.42% against April’s 6.77% drop.
Pulses inflation eased to 10.41% from 5.57% in April, while cereal inflation stood at 2.56%, down from 3.81% in the previous month.
A Reuters poll had earlier projected that wholesale price index (WPI)-based inflation would slip to 0.80% in May, marginally lower than April’s reading. However, the actual print came in even lower, marking the slowest pace of wholesale inflation since March 2024.
On a month-on-month basis, WPI inflation contracted to 0.06% in May from 0.19% in April.
In the manufacturing segment, which accounts for over 60% of the WPI basket, inflation stood at 2.04% in May. Primary articles inflation contracted to 2.02% in May, while inflation in fuel and power eased further, registering a 2.27% contraction compared to a 2.18% decline in April.“
The cooling was broad-based, with the food, non-food manufacturing, minerals, and fuel and power segments contributing to the dip in the headline print between these months,” said Rahul Agrawal, Senior Economist at ICRA.
At the same time, India’s retail inflation also moderated, falling to 2.82% in May, its lowest level in more than six years. In April, retail inflation had touched a 69-month low of 3.16%, down from 3.34% in March.
RBI’s Inflation Outlook Remains Cautiously Optimistic
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), during its April meeting, acknowledged the ongoing decline in inflation, largely driven by softer food prices. The committee revised its inflation forecast for FY26 to 4%, down from 4.2% projected in February, indicating an improved outlook for price stability.
The central bank also noted that inflation risks remain broadly balanced, suggesting it may continue to maintain its cautious policy stance while monitoring evolving price pressures.
