NEW DELHI: Retail inflation dipped to an 11-month low in April, led by deflation in fuel and light segment and softening pressures on clothing and footwear, pan, tobacco and intoxicants segments, but food and beverages inflation remained stubborn. Experts said continued uncertainty over food inflation dims the prospects of interest rate cuts for now.
Data by the National Statistical Office on Monday showed retail inflation, as measured by the consumer price index, rose an annual 4.8% in April, marginally slower than the 4.9% in March. Rural inflation was higher at 5.4% while urban was at 4.1%.
Inflation in the food and beverages group rose to 7.9% in April from 7.7% in March, led by higher prices in cereals, meat and fish, oils and fat and fruits. Inflation in the vegetables and pulses & products segment remained in double digits for 11 months in a row. Vegetables inflation rose an annual 27.8% in April, while pulses & products surged 16.8%.
Retail inflation had eased to a five-month low of 4.9% in March, slowing from 5.1% in Feb. It was led by marginally moderating food inflation.
RBI governor Shaktikanta Das has said that food inflation continues to exhibit considerable volatility impeding the disinflation.
“We fear that the food and beverages inflation will retrace above the 8% mark in May, partly on account of the adverse base (+3.3% in May 2023 Vs +4.2% in April 2023), as well as the above-normal temperatures and heatwave conditions during summers, which would push up the headline CPI inflation to a five-month high of 5.1-5.2% in the ongoing month,” said Aditi Nayar, chief economist at ratings agency ICRA. “With continued uncertainty, the chance of a stance change in the upcoming monetary policy review appears dim,” said Nayar.