India’s Retail Inflation Eases To 4.7% While CPI Remains Within RBI Tolerance

According to figures provided by the Ministry of Statistics on Friday, May 12, India’s retail inflation slowed to an 18-month low of 4.70 percent in April on an annual basis, down from 5.66 percent in March.

Food And Fuel Prices To Be Credited For Low CPI

For the second month in a row, the inflation rate measured by the consumer price index (CPI) is within the Reserve Bank of India’s (RBI) tolerance range of 2–6%. Apart from the low base impact, the figure can be attributable to price stability in food and gasoline. Along with decreasing energy prices, relaxing grain and vegetable prices have also helped to contain inflation.

In April, the Consumer Food Price Index (CFPI) decreased to 3.84 %. Urban inflation was 4.85 percent, compared to rural inflation of 4.68 percent. In April, the inflation rate for vegetables decreased by 6.50 percent. Food and beverage and fuel category inflation rates were 4.22 and 5.52%, respectively.

Implication Of Declining Inflation

When the Monetary Policy Committee of the central bank meets on June 6–8, the declining inflation would likely support keeping the benchmark rate steady for a second time.

India’s central bank startled the markets last month by maintaining the same repo rate after six straight increases to combat inflationary concerns. For the remainder of the year, many analysts predict it to stay in cease mode to help the recovery of Asia’s third-largest economy.

As per The Times Of India, policymakers are likely to be relieved by a decrease in inflation while the economy is struggling due to geopolitical unrest and sluggish global demand.

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