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April CPI 4.7% vs 5.66% last month
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April food CPI 3.84%
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Core inflation at 5.2% vs 5.75%-5.78% - economists
(Adds cenbank governor's comments)
By Aftab Ahmed
NEW DELHI, May 12 (Reuters) - India's annual retail
inflation eased to 18-month low in April, staying well below the
Reserve Bank of India's (RBI) upper tolerance limit for the
second consecutive month, as food prices eased.
Annual retail inflation eased to 4.7% in April
from 5.66% in the previous month, government data showed on
Friday. This was the lowest reading since October 2021, when it
hit 4.48%, and also lower than Reuters' forecast of 4.80%.
The Reserve Bank of India (RBI) targets an inflation range
of 2%-6%.
"This (April inflation number) gives me and my colleagues in
the RBI reasonable amount of confidence, I would say good amount
of confidence, that the monetary policy is on the right track,"
RBI governor Shaktikanta Das said at an event in Mumbai after
the data was released.
Food inflation, which accounts for nearly half of the
overall consumer price basket, moderated further to 3.84%
compared with 4.79% in the previous month.
"A lack of flare-up of food inflation, gradual moderation in
core inflation, and strong support from a favorable base effect
in case of fuel inflation has played a key role," Mumbai-based
Vivek Kumar, economist at Quanteco Research, said.
Food inflation was the lowest since a November 2021 reading
of 1.87%.
Core inflation, which has been a major concern for policy
makers for months, continued to be below 6% for second
consecutive month. According to three economists' estimates,
core inflation was at 5.2% in April, compared with between 5.75%
and 5.78% in March.
The Indian government does not release core inflation
figures.
The price of vegetables fell 6.5%, while edible oil fell
12.33%, offsetting a sharp 13.67% rise in cereal prices and an
8.85% rise in milk prices.
Most economists expect price inflation to remain well below
6% in the coming months, even though it is expected to rise from
April levels.
"With inflation risks easing, we expect MPC to remain on a
'pause' at least till the end of CY2023," said Garima Kapoor, an
economist at Elara Capital.
Last month, the RBI surprised markets by holding its key
repo rate steady after six consecutive hikes and economists
expect it to remain on hold for the rest of the year, in its bid
to support the economic recovery in Asia's third-largest
economy.
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Retail inflation cools down Components of India's retail inflation ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Aftab Ahmed and Nikunj Ohri, additional reporting
by Siddhi Nayak in Mumbai; editing by John Stonestreet, Mark
Heinrich and Sharon Singleton)
