Inflation Rate Falls to 2.18 per cent in May 2017, India’s lowest since 2012

India’s annual consumer price inflation fell to 2.18 per cent in May (which is the lowest inflation rate since 2012) as compared to the inflation rate of 5.76 per cent in May 2016, as per the data given by Central Statistics Office on Monday. In the month of April 2017, consumer price index was 2.99 per cent.

Last week, the RBI did a sharp downward revision to inflation forecast of this year, lowering the projection from 4.5 per cent to 2.0- 3.5 per cent (Apr-Sep) and from 5.0 per cent to 3.5-4.5 per cent (Oct-Mar).

Retail food prices fell 1.05 percent in May from a year ago, compared to a 0.61 percent gain in April. India’s CPI rural and urban inflation fell to 2.30 per cent and 2.13 per cent respectively. India’s May CPI fuel, light index was down 0.3 per cent while CPI housing index was up by 0.3 per cent.  CPI pulses group index was also down 1.9 per cent in May. Manufacturing sector, which constitutes 77.63 per cent of the index, grew at 2.6 per cent in April compared to 5.5 per cent in the same month last year, as per the data provided by the Central Statistics Office.

This consumer price inflation was far below the estimates of Reserve Bank of India.