India's May retail inflation reaches record low of 2.18%

India's retail inflation, or consumer price index (CPI) reached new lows in the month of May 2017 to stand at 2.18% as against 5.76% in May of 2016.  

This is the lowest recorded retail inflation since 2012 and remains below Reserve Bank of India's (RBI) medium term threshold of 4%. 

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Data compiled by Ministry of Statistics and Programme Implementation (MoSPI) show that consumer food price index (CFPI) went into the negative territory to stand at -1.05% in May 2017 as against 7.47% in May 2016. 

Rural CFPI stood at -0.60% and urban CFPI stood at -1.85%. 

Retail inflation or CPI for April 2017 was at 2.99%. 

A Reuters poll of 25 economists expected retail inflation for May 2017 to ease to 2.60% on the back of falling food and perishable goods prices. 

A good June-September monsoon, which delivers about 70 percent of India's annual rainfall, will help drive higher food and grain production, keeping food inflation in check.

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Earlier this month, RBI kept its benchmark repo rate unchanged whle softening its hawkish stance following a drop in consumer inflation. 

The central bank lowered its headline inflation forecasts to a range of 2.0-3.5% for the first half of fiscal year 2017/18 and 3.5-4.5% in the second half, down from 4.5% and 5%, respectively.

(With Reuters inputs)

Read Zeebiz.com's full coverage on retail inflation here.