Daijiworld Media Network – New Delhi

New Delhi, Jun 17: In a positive development for the Indian economy, wholesale price inflation dipped to a 14-month low in May, offering relief from persistent cost pressures. The fall was largely driven by a steep decline in prices of food, fuel, and base metals, according to data released by the Commerce and Industry Ministry on Monday.

The wholesale price index (WPI) inflation stood at 0.4 per cent in May, down from 0.9 per cent in April, marking the sixth consecutive month of deceleration. This downtrend is being seen as a stabilising factor for input costs across various sectors.

A major contributor to this decline was a sharp 21.6 per cent year-on-year fall in vegetable prices, deepening from April’s 18.3 per cent drop. Core components like onions, potatoes, and tomatoes (TOP) saw significant price corrections. Potato prices plunged 29.4 per cent, while onions dropped 14.4 per cent in May.

Overall, food articles inflation slipped by 1.6 per cent, aided by softer prices of spices, food grains, and protein-based items such as eggs, meat, and fish. The vegetable index witnessed its fourth straight month of decline, providing much-needed respite for consumers and producers alike.

While this decline bodes well for macroeconomic stability, economists have sounded caution. Global factors such as rising geopolitical tensions between Israel and Iran, and uncertainties in global trade routes could trigger volatility in crude oil prices, potentially impacting inflationary trends in the coming months.

This development follows last week’s announcement that retail inflation had also fallen to a 75-month low in May, indicating broader disinflationary momentum across the economy.

Policymakers are likely to keep a close watch on international developments, even as domestic price pressures appear to be cooling for now.