Wholesale price index (WPI)-based inflation remained in negative territory for the seventh straight month in May at (-) 2.36 per cent, largely due to the softening of prices of food articles and a further contraction in prices of manufactured products.
The fall in fuel prices, which saw a contraction of 10.50 per cent in May on a year-on-year basis, also helped.
WPI inflation, which has been in the negative zone since November 2014, stood at 6.18 per cent in May last year and (-) 2.65 per cent in April 2015.
For the month under review, manufactured products inflation stood at (-) 0.64 per cent, lower than the (-) 0.52 per cent in the previous month.
Led by a nearly 50 per cent fall in potato prices, vegetable price inflation contracted 5.54 per cent in May this year.
Commenting on the WPI inflation print for May 2015, Chandrajit Banerjee, Director General, Confederation of Indian Industry, said this should propel the Reserve Bank of India to continue with its rate easing cycle to support demand and strengthen the nascent recovery in industrial production.
FICCI President Jyotsna Suri said the government has already outlined its plan of action to deal with any contingency on account of a below-normal monsoon.
“This should keep in check any pressure on inflation arising from the food segment,” she said.
Assocham President and YES Bank chief Rana Kapoor said the continuous downtrend in WPI seen over the past few months is a positive signal towards stabilisation of prices and this should surely help in further boosting economic activity.