NEW DELHI: Retail inflation slumped to record low of 2.18 per cent in May driven by sharp drop in kitchen staples like vegetables and pulses, strengthening Government’s case for lowering of interest rate by RBI.
For the first time since January 2012, food prices saw deflation in May (-1.05 per cent) and the prospect of good monsoon rains is likely to keep food inflation in check.
Inflation apart, industrial output too slipped to 3.1 per cent in April from 6.5 per cent a year ago, possibly because of lagged impact of demonetisation, Government data showed today.
The worst performing sectors in April were manufacturing, capital goods and consumer durables.
The Consumer Price Index (CPI) based inflation strengthened the finance ministry’s stand that Reserve Bank of India’s forecast on price rise had large errors and there was a case for cutting interest rate to help private investments to pick and boost economic growth.
Retail inflation was the lowest since the Government started publishing a wider CPI data in 2012. (AGENCIES)
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