Consumer price inflation based on the consumer price index eased to levels around 2.18 in May from 2.99 per cent in April and 5.76 per cent in May last year, helped by smaller rises in food prices.
But, with the onset of monsoon and the brief farmers' stir early this month, consumer prices could rebound with a spurt in the prices of vegetables and other essentials could still push up consumer prices, leaving no manoeuvring room for the Reserve Bank of India on interest rates, say experts.
Consumer price inflation for the rural areas stood at 2.30 in May 2017 against 3.02 per cent in April 2017 and 6.45 per cent in May 2016.
Consumer price inflation for the urban areas stood at 2.13 in May 2017 against 3.03 per cent in April and 4.64.89 per cent in May 2016.
Food price inflation stood at -1.05 in May 2017 against 0.61 per cent in April and 5.76 per cent in May last year.
Food price inflation for rural areas stood at -0.60 in May 2017 against 0.69 per cent in April and 6.45 per cent in May 2016.
Food price inflation for urban areas stood at -1.85 per cent in May 2017 against 0.46 per cent in April and 5.97.247 per cent in May last year.
RBI's Monetary Policy Committee (MPC), which has a mid-term inflation target of 4 per cent, is not convinced of an easing of inflation as most members at the last meeting expressed concern over upside risks to core inflation.
Economists expect the central bank to keep its policy rate unchanged this year.