Wholesale inflation eases to 0.39% in May fom 0.85% in previous month; food inflation at 1.72%

WPI Inflation Data: Wholesale inflation eased to 0.39 per cent in May from 0.85 per cent the previous month, according to official data released on Monday. An increase in the prices of manufactured food products, electricity, chemical products and transport equipment kept the wholesale prices in inflationary mode. Measured by the Wholesale Price Index (WPI), wholesale inflation--also known as headline inflation--captures the rate of increase in the wholesale prices of select goods and services in the country.    

Food inflation, measured by the WPI Food Index, eased to 1.72 per cent in May from 2.55 per cent in the previous month, the data showed. 

The food index, comprising food articles and food products from the primary articles and manufactured products categories, carries an overall weight of 24.38 per cent in the WPI.

Inflation in manufactured products, which carry a weight of 64.23 per cent in the WPI, worsened to 2.62 per cent last month from 2.04 per cent in April. 

On the other hand, the primary articles and fuel and power categories remained in deflationary mode. 

Deflation in the primary articles group (22.62 per cent weight) worsened to 1.44 per cent from 2.02 per cent the previous month. 

In the fuel and power group (13.15 per cent weight), deflation came in at 2.18 per cent in May, as against 2.27 per cent in April. 

The Reserve Bank of India's Monetary Policy Committee (MPC), the country's top benchmark interest rate-deciding panel headed by the RBI Governor, tracks consumer inflation data primarily for formulating its policy.

This month, the MPC delivered a better-than-expected 50-basis-point reduction in the repo rate while switching to a 'neutral' stance of policy from 'accommodative'.