Veggies, pulses drag inflation to record low of 2.18% in May

India’s annual consumer price inflation eased further to 2.18% in May, driven down by cooling food prices, government data showed on Monday.

Retail inflation fell to a record low of 2.18% in May as prices of kitchen staples like vegetables and pulses declined sharply although there was a marginal spike in fruit rates.

India’s retail inflation cooled to a five-year low, government data released on Monday showed. (HT Archive)

Clothing, housing, fuel and light also saw lower inflation.

“The numbers are in line with expectations and I expect a 25 bps rate cut in August and at least 50 bps cut by the end of the year. Risks are pretty balanced and more to the downside, and I agree with RBI’s inflation trajectory, which RBI put out in the last policy,” said Kapil Gupta, economist, Edelweiss Securities.

Earlier this month, the Reserve Bank had maintained status quo on key lending rate (repo) citing risks to inflation.

The CPI based retail inflation was at 2.99% in April 2017. In May 2016, it was at 5.76%.

The overall food inflation was in negative territory at (-) 1.05% during the month.

Prices of vegetables declined by 13.44% and that of pulses and products by 19.45%.