NEW DELHI / CHENNAI: Retail inflation fell to a record low of 2.18 per cent in May aided by the fall in prices of vegetables and pulses, and a drop in prices of clothing, housing and fuel. The figure stood at 5.76 per cent around the same time last year and at 2.99 per cent last month. This is the lowest level that inflation has touched ever since the new series was introduced in 2012.
Low inflation levels are an indicator of falling demand and weak economic activity in the market, say experts, and May’s numbers have put pressure on the Central bank to reduce interest rates in order to spur growth.
Despite growing clamour by industry bodies and the government for a cut in key interest rates, the Reserve Bank of India left them unchanged during its Monetary Policy Review last week, citing an ‘uncertain inflation outlook’.