WPI inflation falls to 14-month low
New Delhi
India’s Wholesale Price Index (WPI) inflation dropped to a 14-month low of 0.39% in May, falling from 0.85% in April and 2.05% in March, according to government data. Month-on-month inflation also turned negative at -0.06%, showing a continued easing trend.
The drop was mainly due to lower prices of food and fuels like petrol and diesel. This downward shift also reflects growing agricultural output, which helped bring food inflation down to 0.99%—its lowest since October 2021. This marks the seventh straight month of falling food prices.
Retail inflation, measured by the Consumer Price Index (CPI), also fell to 2.82% in May, the lowest since February 2019. This indicates that prices for consumers have eased significantly over the past year.
Responding to these developments, the Reserve Bank of India (RBI) recently cut the repo rate by 50 basis points—from 6% to 5.5%—to support economic growth. The RBI also reduced the Cash Reserve Ratio (CRR) by 100 basis points, from 4% to 3%, in four stages. This move is expected to release ₹2.5 lakh crore into the banking system and improve credit availability.
RBI Governor Sanjay Malhotra said inflation has now moved well below the central bank’s target and shows broad-based improvement. The RBI has revised its inflation outlook for 2025–26 from 4% to 3.7%.
With this trend, inflation may remain below the RBI’s 4% target in the coming year, supporting growth while keeping prices under control.