Retail Inflation Sees Significant Drop in April, Hits 4.7%
According to government data released, India’s retail inflation based on the consumer price index decreased to 4.7% in April from 5.66% in the previous month due to lower food and fuel prices. This is the lowest inflation rate in 18 months and falls within the Reserve Bank of India‘s acceptable range of 2-6% for the second consecutive month.
Retail Inflation Sees Significant Drop in April, Hits 4.7%: Key Points
- However, this is the 43rd month in a row where retail inflation remains above the RBI’s target of 4%.
- The favorable base in April played a role in this positive inflation data.
- Food prices decreased significantly, with retail food inflation dropping to 3.84% in April from 4.79% in the previous month, while the consumer food price index stood at 8.31% in April 2022.
- In April 2023, India’s consumer price index-based retail inflation decreased to a low of 4.7% in 18 months, with a sharper decline in food inflation observed in urban areas compared to rural areas.
- The overall retail inflation in rural India decreased to 4.68% in April 2023 from 8.38% in the same month last year, while in urban areas, it decreased to 4.85% from 7.09%.
- The CPI is based on data collected from 1114 urban markets and 1181 villages covering all states and union territories.
- The core inflation, which excludes volatile food and fuel items, decreased to 5.2% in April from 5.8% in March.
The RBI is expected to keep policy rates unchanged in its review in the first week of June due to the moderation in inflationary pressure, including the decline in core inflation. In its last meeting in the first week of April, the RBI’s Monetary Policy Committee decided to maintain the policy repo rate.