India's Retail Inflation Eases to 4.83% in April, Food Prices Remain High

India's retail inflation rate eased to 4.83% in April 2024, down from 4.85% in March, remaining within the Reserve Bank of India's tolerance range. Food prices continued to rise, with food inflation accelerating to 8.70% in April from 8.52% in the previous month.

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Aqsa Younas Rana
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India's Retail Inflation Eases to 4.83% in April, Food Prices Remain High

India's Retail Inflation Eases to 4.83% in April, Food Prices Remain High

India's retail, inflation, per cent rate eased slightly to 4.83% in April 2024, down from 4.85% in March, according to government data released on Monday. The inflation rate remains within the Reserve Bank of India's tolerance range of 2-6% for the eighth consecutive month.

Why this matters: The easing of retail, inflation, slightly, surge, food, prices has significant implications for India's economy, as it can influence the Reserve Bank of India's monetary policy decisions and impact the country's growth prospects. Moreover, the persistent rise in food prices continues to strain household budgets, making it a pressing concern for policymakers and citizens alike.

Despite the marginal decline in overall retail, inflation, slightly, food, inflation, food prices continued to rise, with food inflation accelerating to 8.70% in April from 8.52% in the previous month. The inflation rates for cereals and pulses, significant components of India's staple diet, were recorded at 8.63% and 16.84%, respectively. Vegetable prices also remained elevated, rising 27.80% year-on-year in April.

Economists and experts weighed in on the latest inflation figures. "CPI inflation in April 2024 continues the downward trend since December 2023... If this trend continues, CPI inflation in 1Q of FY25 may turn out to be marginally lower than RBI's projection of 4.9%," said DK Srivastava, Chief Policy Advisor at EY India. Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, noted that "unchanged headline and core retail, inflation reading from previous month will continue to provide respite to the MPC. However, erratic weather and heatwaves should keep the overall sentiment cautious."

The Reserve Bank of India's Monetary Policy Committee (MPC) decided to maintain the policy repo rate at 6.5% for the seventh consecutive time in its announcement on April 5. The central bank projects Consumer Price Index (CPI) instant, view, retail, inflation to be 4.5% for the current financial year.

India's retail, inflation, month, low, food, prices, surge has been on a downward trajectory since hitting a peak of 7.8% in April 2022. The government has taken measures to control food prices, including imposing export restrictions on certain commodities and increasing domestic supplies. However, the impact of erratic weather conditions and heatwaves on food production remains a concern for policymakers.

While the easing of overall inflation provides some relief, the persistent rise in food prices continues to strain household budgets across the country. As RBI Governor Shaktikanta Das stated, "The Monetary Policy Committee (MPC) remains focused on aligning inflation to the target on a durable basis. We derive satisfaction from the progress made under disinflation. But the task is not yet finished." The central bank's cautious stance underscores the ongoing challenges in navigating inflationary pressures while supporting economic growth.

Key Takeaways

  • India's retail inflation rate eased to 4.83% in April 2024, within RBI's 2-6% tolerance range.
  • Food inflation accelerated to 8.70% in April, with cereals and pulses rising 8.63% and 16.84% respectively.
  • Economists expect inflation to remain under control, but erratic weather and heatwaves are a concern.
  • RBI's Monetary Policy Committee maintained the policy repo rate at 6.5% for the seventh consecutive time.
  • Despite easing inflation, food prices continue to strain household budgets, a pressing concern for policymakers.