New Delhi, May 13 (FN Bureau) India’s retail inflation measured by consumer price index (CPI) eased further and dipped to an 11-month low of 4.83% in April 2024, as per official data released on Monday. In March, headline inflation print had come in at 4.85%. The retail inflation print has remained within the Reserve Bank of India (RBI)’s tolerance band of 2-6% for nearly eight months now. As per data released by Ministry of Statistics & Programme Implementation (MoSPI), food inflation however inched up to 8.70% in April this year from 8.51% in the previous month. “The annual inflation rate based on 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 is 5.43% and 4.11%, respectively,” MoSPI said in a statement. It further said that among the top five groups, the year-on-year inflation in groups ‘Clothing & Footwear’, ‘Housing’ and ‘Fuel & light’ has decreased since March this year. Notably, vegetable inflation in the month of April this year remained elevated at 27.80% while pulses and products inflation were at 16.84%. Cereals and products inflation was 8.63% in April this year. With inflation staying within the upper limit of RBI and also showing a declining trend, the RBI last month kept policy repo rate unchanged at 6.50% for the seventh consecutive time while reviewing the monetary policy. The central bank has projected the CPI inflation for the current financial year (2024-25) at 4.5%.
Commenting on the April inflation numbers, ICRA chief economist Aditi Nayar said that the rating agency fears that the food and beverages inflation will retrace above the 8% mark in May 2024, partly on account of the adverse base as well as the above-normal temperatures and heatwave conditions during the summer season. She said that higher food prices could push up the headline CPI inflation to a five-month high of 5.1-5.2% in the ongoing month. “The impending favourable base effects during Q2 FY2025 are expected to materially soften the headline inflation print to 2.0-4.0% in July 2024 and August 2024. Nevertheless, a timely onset and well distribution of monsoon season would be crucial to support agriculture output in 2024-25 and help control food inflation,” Nayar said. She added, “With continued uncertainty, especially on the risks to the food inflation trajectory after Q2 FY2025, the chance of a stance change (by RBI Monetary Policy Committee) in the upcoming June 2024 monetary policy review appears rather dim.”