Retail inflation eased in April over a year ago when pandemic-related supply disruptions had pushed up food prices.
Inflation as measured by the Consumer Price Index stood at 4.29% compared with 5.52% in March, according to data released by the Ministry of Statistics and Programme Implementation on Wednesday. On a monthly basis, the index rose by 0.7% as the gauge climbed to 157.9 in April from 156.8 in March.
A Bloomberg poll of 35 economists had pegged April retail inflation at 4.1%.
For April last year, data was imputed for CPI groups for which no data was available or collected or transacted. As such, the year-on-year computation of price changes would also be impacted by those underlying anomalies.
Inflation in food and beverages was at 2.66% in April 2021 compared with 5.24% in March. On a monthly basis, it rose 0.9% from March 2021.
Given the high base related to the supply disruptions seen during the nationwide lockdown in April 2020, the CPI inflation dipped to a three month low in April 2021, while printing somewhat higher than expectations, said Aditi Nayar, chief economist at ICRA. Overall, the prevailing localised restrictions appear to have had a limited impact on prices in April 2021, she added.
As the lockdown base effect fades, CPI inflation is expected to bounce back to an average of 5.0% in the remainder of the first half of FY22, ruling out the possibility of further rate cuts to support economic activity and sentiment, Nayar added.
Inflation Internals
- Inflation in the pulses category was at 7.5% in April 2021. The index rose 1.18% over a month ago.
- Cereal prices fell 2.96% annually and rose 0.14% monthly.
- Vegetable prices contracted 14.18% annually and fell 3.2% monthly.
- Fuel and light inflation stood at 7.91% y-o-y with no change seen over a month ago.
- Inflation in transport and communication was at 11.04% in April. The index rose 0.5% compared to the previous month.
- Clothing and footwear inflation was at 3.49% in April, with the index rising 0.6% compared to March.
- Housing inflation stood at 3.73%. The index rose 0.9% over the previous month.
- Household goods and services inflation was at 2.01%. Compared to March, prices rose 0.5%.
- Health inflation was at 7.76% in April. It rose 0.5% compared to the previous month.
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