The retail inflation on Wednesday hit a new low of 1.54 per cent in June, down from 2.18 per cent in May, helped by a fall in food prices. The rate of inflation was 5.77 per cent in the same month of last year, official data showed. Industrial output also decreased in May due to a slowdown in the manufacturing sector.
The data further revealed that output of the capital goods segment, considered as key indicator of investment, shrunk by 3.9 per cent compared to a high growth of 13.9 per cent recorded in May 2016.
The consumer durables segment too witnessed a decline. While mining sector output declined by 0.9 per cent in May against 5.7 per cent growth in the year-ago month, the growth of manufacturing sector slowed to 1.2 per cent from 8.6 per cent in the same month last year.
For the first time since January 2012, food prices saw deflation in May (-1.05 per cent) and the prospect of good monsoon rains is likely to keep food inflation in check. More details awaited