Inflation based on the consumer price index (CPI) slipped to a record low of 2.2% in May as food inflation dipped into negative territory. A record growth in production of pulses in fiscal 2017, prospects of healthy monsoon in 2017 and continued decline in vegetable inflation supported by a high base effect saw to a deflationary trend in these commodities.
Meanwhile, fuel inflation (fuel and light, petrol and diesel) also continued its downward trajectory, falling to 6.2% compared with 7.1% in April. Core inflation (CPI excluding food, fuel and light, petrol and diesel) saw only moderate easing to 4.1%, compared with 4.2% in April, as inflation stayed stubbornly high in the housing (at 4.8%) and education (at 4.9%).
This is the second monthly release of the Index of Industrial Production (IIP) with the new base (2011-12). It looks like it will take some time for the new IIP series to stabilise as the latest data release suggests a considerable revision to the previous month’s manufacturing IIP – the most volatile segment of all – and hence in the overall IIP as manufacturing accounts for the bulk of it. Manufacturing IIP growth for March was revised to 2.4% from 1.2% earlier and overall IIP to 3.8% from 2.7%. On the whole, IIP growth slowed down to 3.1% in April from 3.8% in March 2017, following a sharp reduction in growth of mining activity