Retail inflation falls to 6-yr low of 2.82% in May

Food inflation in May at 0.99% is the lowest since October 2021 when it was 0.85%

- Roshan Kishore

NEW DELHI: Inflation fell to a six-year low of 2.82% in May, primarily as a result of the collapse in food inflation which fell to a four-year low of just 1%. The latest inflation numbers vindicate the Reserve Bank of India's aggressive interest rate reduction of 50 basis points—one basis point is one hundredth of a percentage point—earlier this month.

But the low food inflation does raise a red flag about a potentially adverse impact on farm earnings because of a collapse in prices of some farm products, especially vegetables.