Lower prices of manufactured items and key transportation fuels eased India’s annual rate of inflation based on wholesale prices to 2.45 per cent in May from 3.07 per cent in April, official data showed.
“Build up inflation rate in the financial year so far was 1.08 per cent compared to a build up rate of 1.72 per cent in the corresponding period of the previous year.” On a year-on-year (YoY) basis, the expenses on primary articles, which constitute 22.62 per cent of the WPI’s total weightage, rose to 6.16 per cent from 3.79 per cent. Similarly, the prices of food items increased at a faster rate. The category has a weightage of 15.26 per cent in the WPI index. It increased to 6.99 per cent from 1.74 per cent. The cost of fuel and power, which commands 13.15 per cent weightage, increased to 0.98 per cent against a rise of 12.65 per cent on a YoY basis.
India Ratings & Research Principal Economist Sunil Kumar Sinha said the core inflation at 1.2 per cent is 29 months’ low in May 2019. “There is still a scope of one more rate cut in FY’20. However, besides being dependent on data it will also take into consideration fiscal policy stance of the government,” Sinha added.