New Delhi: Deflationary pressure continued for the seventh month in a row with the annual rate of inflation, based on monthly WPI, stood at -2.36% for the month of May as compared to -2.65% for the previous month.
Inflation, as measured on the Wholesale Price Index (WPI), has been in the negative zone since November, 2014. In May last year, it was 6.18%.
Inflation was -2.65% in April, -2.33% in March, -2.17% in February, -0.95% in January, -0.50% in December and -0.17% in November.
In April 2015, the manufactured products segment witnessed deflation for the second consecutive month as prices dropped by a record low of -0.52%.
A year ago, prices were rising at a worrying rate of 6.2%, but the collapse in global oil prices has dramatically shifted the trend, providing a major help to the central bank.
The Consumer Price Index data, released last week, showed retail inflation edged up to 5.01% in May on costlier pulses even as prices of fruits and vegetables eased during the month.
The Consumer Price Index-based inflation was at 4.87% in April 2015. The retail inflation was 8.33% in May 2014.
Earlier this month, the Reserve Bank of India had cut interest rates for a third time this year, a move it wouldn’t be able to make if it weren’t for falling prices.
RBI, which tracks retail inflation as a benchmark for its monetary policy, said earlier this month that price rise was still a worry for the central bank. RBI expects inflation to rise to 6% by January 2016.