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Retail inflation eases to 11-month low in April

At 4.85%, Consumer Price Index (CPI) was within the RBI’s tolerance range of 2-6%

Retail inflation eases to 11-month low in April
[Source photo: Chetan Jha/Press Insider]

Retail inflation in April eased to an 11-month low of 4.83% despite a marginal rise in food prices, government data showed.

“The annual inflation rate based on the all India Consumer Price Index (CPI) number is 4.83% (provisional) for the month of April, 2024 (over April 2023). Corresponding inflation rate for rural and urban areas is 5.43% and 4.11%, respectively,” the ministry of statistics and program implementation said. 

However, food inflation was 8.70% in April this year, marginally up from 8.52% in March. 

The retail inflation has now stayed within the Reserve bank of India’s (RBI’s) tolerance range of 2-6% for eight months in a row. It has, however, stayed above the medium-term target of 4% for over 4 years. 

In March, CPI was at a 10-month low of 4.85%. 

Among the top five groups, the year-on-year inflation on groups clothing and footwear, housing, and fuel and light has decreased since last month.

“CPI inflation, broadly in line with the expectations, moderated to 4.83% in April. Core inflation persisted at a benign rate of 3.2%. Reversing last month’s trend, food inflation inched up to 7.9% as the ongoing deflation in the oil and fat category fell to a single digit after 12 months,” Rajani Sinha, chief economist at CareEdge, noted.

The high inflation in specific food categories, including vegetables and pulses, remains a concern. While the outlook for food inflation has brightened due to anticipations of a normal monsoon, the temporal and spatial distribution of monsoon would be critical factors, Sinha added.

Odisha witnessed the higher side of inflation 7.11%, while Delhi saw the lowest range of 2.17%.

Among other states recording higher inflation than the national average includes Andhra Pradesh, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Assam, Bihar, Haryana, Chhattisgarh, Karnataka, Kerala, and Madhya Pradesh.

“Although the YoY (year on year) inflation in the miscellaneous segment remained unchanged at 3.5% in April 2024 vis-à-vis the previous month, the MoM (month on month) uptick was larger than expected at 0.6%, marking the highest increase in as many as 23 months. This can largely be attributed to an unusually high 3.0% sequential increase in the personal care and effects sub-group, possibly reflecting the surge in global gold prices,” Aditi Nayar, chief economist, head-research and outreach, ICRA Ltd said.

Nayar said that ICRA fears that the food and beverages inflation will retrace above the 8.0% mark in May 2024, partly on account of the adverse base (+3.3% in May 2023 vs. +4.2% in Apr 2023), as well as the above-normal temperatures and heatwave conditions during the summer season, which would push up the headline CPI inflation to a five-month high of 5.1-5.2% in the ongoing month.


Javaid Naikoo is a senior correspondent at Press Insider. A seasoned and analytical journalist, Javaid covers economy and policy from New Delhi. He has reported on politics, business and social issues in the past, and also has a keen interest in photojournalism. His compelling words and art have appeared across domestic and global publications. More

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