Inflation falls to 3-year low at 4.7%

India's wholesale price-based inflation fell to 4.7% in May, the lowest in more than three years, on the back of softening in price rise of manufactured as well as primary articles, government data showed Friday.

The country's main inflation indicator based on Wholesale Price Index (WPI) was recorded at 4.89% in April and 7.55% in the corresponding month of last year.

Inflation for March is revised downward at 5.65% from 5.96% reported earlier, according to data released by the ministry of commerce and industry here.

This is the fourth straight month of easing in the country's headline inflation. The consistent decline in inflation will give room to the central bank to further ease monetary policy.

The Reserve Bank of India (RBI) is scheduled to announce review of the monetary policy June 17. The central bank had cut interest rates in all the last three policy review.

Slower increase in the prices of manufactured as well as primary articles have helped in easing of inflationary pressure in the recent months.

Inflation of manufactured products declined to 3.11% in May, while primary articles inflation eased to 6.65 percent. Food inflation declined to 8.25 percent.

Fuel and power inflation stood at 7.87% in the month under review.

As per the Central Statistics Office (CSO) data released earlier this week, retail inflation based on Consumer Price Index (CPI) declined to 9.31% in May as compared to 9.39% in the previous month and 10.39% recorded in March.

Build-up inflation rate in the first two months of the current financial year is 0.88 percent as compared to build-up rate of 1.80% in the corresponding period of the previous year, the commerce and industry ministry said in a statement.

Prices of some items like petrol, potato, metal and iron declined in May year-on-year.

Petrol became cheaper by 4.43%. Potato price declined by 3.44%. Basic metal and metal products became cheaper by 1.50 percent and iron became cheaper by 7.29 percent.

Prices of most fruits and vegetables grew at a slower rate. However, onion price almost doubled. It jumped by 97.40% year-on-year during the month under review.

Cereals became costlier by 16.01%. Price of rice surged by 18.48% and wheat became costlier by 12.65%.