Food inflation hits 4-month high of 8.7% in April

Indian consumers faced a further rise in food prices in April, while the overall retail inflation rate remained virtually unchanged at 4.83% last month from 4.85% in March. Food inflation rose to a four-month high of 8.7% in April from 8.5% in March, with rural consumers seeing a sharp increase of 8.75%.

The gap between the inflation experience of urban and rural consumers remained sharp for the second consecutive month, with rural households seeing prices rise by 5.43%, while the overall inflation rate faced by urban consumers reversed marginally from 4.14% in March to 4.14% in April. It increased to 4.11%.

On a month-on-month basis, price levels increased by about 0.5%, with urban consumers facing a sharp rise in overall prices as well as food items. Food prices in urban India rose 1.03% from March levels, while the rise for their rural counterparts was much lower at 0.59%. The consumer price index (CPI) for urban households was 0.6% higher than in March, while it was 0.37% higher for rural India.

The Reserve Bank of India (RBI) expects retail inflation to decline to an average of 4.5% in 2023-24 from 5.4% this year, with average inflation expected to be 4.9% in the current April to June quarter. As Governor Shaktikanta Das has stressed, economists do not expect any change in the monetary policy stance until inflation reaches the RBI's 4% target on a sustainable basis.

Within the food basket, inflation in vegetables eased slightly to 27.8% from 28.3% in March, remaining in double digits for the fifth consecutive month. Inflation in pulses also remained in double digits for the 11th consecutive month, at 16.84% in April, marginally lower than the 17.7% rise in March.

However, cereal inflation rose to 8.63% from 8.4% in March, while meat and fish prices rose 8.2% compared with 6.4% a month earlier. Fruit prices also registered an increase of 5.22%, which was 3.1% in March. Moreover, after 12 consecutive months of deflation exceeding 10%, the year-on-year decline in edible oil prices slowed to 9.4%.

relief from sugar

Sugar and spices provided some support to households' food budgets, with the pace of price rise in the former slowing from 7.2% in March to less than 6% in April, and spices inflation ending a 22-month streak of more than 10%. Decreased to 7.75%. inflation. Egg prices rose 7.1%, slowing from a 10.33% increase recorded in March. Milk inflation also declined to less than 3% from 3.4% in March.

The partial decline in core inflation in April, despite rising food prices, was driven by a sharp decline in fuel and light prices, which were 4.2% lower than the 3.2% decline in March, and helped by a modest decline in . Inflation in some other commodities. These include clothing and footwear, paan, tobacco and intoxicants, housing, health, entertainment and recreation.

Inflation in the education as well as transport and communication sectors declined by about 0.5 percentage points to 4.2% and 1.1% respectively. However, personal care and effects prices rose 7.5% in April, up from 6% in March. On a sequential basis, prices of these commodities increased by 3%.

Among major states, Odisha (7.05%), Assam (6.08%) and Haryana (6.06%) recorded the highest inflation in April, while nine other states including Bihar, Uttar Pradesh, Telangana saw price rises of more than 5%. Went. , Madhya Pradesh, Karnataka and Rajasthan. Overall, inflation was higher than the national average in 14 of the 22 major states for which the National Statistics Office calculates inflation rates, including Gujarat (4.94%) and Kerala (4.84%).

Consumers faced the lowest price rise in Delhi (2.29%), followed by Uttarakhand (3.58%), Maharashtra (3.66%), and West Bengal (3.68%).

Last year's benign base effect and this month's above-normal temperatures and heatwave conditions may further push up food and beverage inflation, pushing core consumer inflation to a five-month high of 5.1%-5.2% in May. Could, admitted Aditi Nair, chief economist at ratings firm ICRA.

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