Retail inflation as measured by the consumer price index (CPI) marginally eased by 2 basis points to an 11-month low of 4.83 per cent in April aided by softening core and fuel inflation even though food inflation accelerated.
Though the prices of vegetables (27.8 per cent), and pulses (16.84 per cent) decelerated compared to the preceding month, they still recorded a double-digit rise in April.
Core inflation has also trended downwards at 3.2 per cent, which is the lowest in the 2012 base CPI series. If this trend continues, CPI inflation in Q1 of FY25 may turn out to be marginally lower than RBI’s projection of 4.9 per cent,” he added.
“Core inflation, which has been under control so far, can spring an upward surprise as companies have raised prices of their products. This holds in the consumer goods segment as they have held back price increases for over a year. Education and health inflation has come down more due to base effects as both tuition fees and hospital charges have gone up in absolute terms. The same holds for pharma products,” he added.
Echoing similar views, Rajani Sinha, chief economist, CARE Ratings, said that apart from elevated food inflation, incremental risk to inflation stemmed from the uptick in global commodity prices, especially industrial metals which were up 20 per cent in the past three months.
Core inflation, which excludes food and fuel components, remained below 3 per cent as prices of clothing and footwear (2.85 per cent), housing (2.68 per cent), and services like recreation (2.64 per cent), education (4.2 per cent), health (4.3 per cent), and transport (1.09 per cent) saw deceleration during the month.
In April, the RBI’s monetary policy committee (MPC) had unanimously kept the policy rate unchanged at 6.5 per cent for a seventh consecutive time and maintained the “withdrawal of accommodation” stance. It has also kept its inflation forecast for the current financial year unchanged at 4.5 per cent.
RBI Governor Shaktikanta Das in his statement had said that food price uncertainties continued to weigh on the inflation trajectory going forward, with a record rabi wheat production expected to temper price pressure and replenish the buffer stocks.
First Published: May 13 2024 | 10:19 PM IST
