Retail Inflation in India Falls Historic Low

IAS Prelims 2023

India’s retail inflation hit a historic low of 1.54 percent in June 2017.  Retail inflation, measured by Consumer Price Index (CPI) remained low in May touching 2.18 percent and 5.77 percent in June last year, owing to a sustained dip in food prices. Low inflation levels can indicate poor demand and weak economic activity.

The year-on-year CPI inflation eased sharply to a series-low 3.0 percent in April 2017, due to food inflation. Inflation numbers continued to plunge to lower levels through May and June.

Consumer food price inflation was (-)2.12 percent in June as compared with 0.69 percent in May.

The sharp fall in food inflation was brought about by a disinflation in the prices of pulses and vegetables.

retail inflation

Vegetables prices fell further and witnessed a negative growth of (-)16.53 percent in June as compared with (-)13.44 percent in May. Similarly, prices of pulses continued to fall at (-)21.92 percent, as compared with (-)19.45 in May.

Housing inflation remained nearly flat, growing 4.70 percent in June from 4.84 percent in May.

Fuel inflation was 4.84 percent in June, as compared with 5.46 percent in May.