Inflation in the food basket also eased to 3.84 per cent in April 2023, as against 4.79 per cent in March. (Representational Image)
CPI inflation at 4.7% in April: This is the second consecutive month for retail inflation which has come under the RBI’s tolerance limit of 4 per cent (+/- 2 per cent).
India’s CPI inflation eased to an 18-month low of 4.7 per cent in April 2023, according to official data released on Friday. This is the second month in a row that retail inflation has come under the RBI’s tolerance limit of 4 per cent (+/- 2 per cent). However, the country’s industrial production based on IIP grew by 1.1 per cent in March 2023, as against 5.6 per cent in the previous month.
According to the National Statistical Office, retail inflation declined to 4.85 percent in urban areas and 4.68 percent in rural areas.
Retail inflation based on the Consumer Price Index (CPI) stood at 5.66 per cent in March 2023 and 7.79 per cent in the year-ago period. Retail inflation in April is the lowest since October 2021, when it stood at 4.48 per cent.
According to the National Statistical Office, inflation in the food basket stood at 3.84 per cent in April, compared to 4.79 per cent in March and 8.31 per cent in the year-ago period.
Retail inflation is projected to increase from 5.7 per cent in December 2022 to 6.4 per cent in February 2023 on higher prices of cereals, milk and fruits and a slower decline in vegetable prices.
The Reserve Bank of India forecast CPI inflation for FY2023-24 at 5.2 per cent, 5.1 per cent in Q1, 5.4 per cent in Q2, 5.4 per cent in Q3 and 5.2 per cent in Q4, with risks evenly balanced.
Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities, said, “April CPI inflation is in line with expectations at 4.7 per cent and March inflation benefited from a favorable base effect similar to the print. Food inflation is easing mostly due to deflation in oil and vegetables ( Seasonal jump in prices is visible).
He said core inflation continued to fall sharply at 5.1 per cent, with a sequential increase of 0.6 per cent month-on-month mainly due to base effects. Overall, the RBI will view this print favorably and remain on pause in the June policy while maintaining a cautious outlook on inflation.
“We continue to pencil in the repo rate to remain unchanged for an extended period subject to global growth prospects, central bank actions and domestic growth prospects,” Rakshit said.
IIP growth in March 2023
According to official data released on Friday, India’s industrial production grew by 1.1 per cent in March. Factory output, measured in terms of the Index of Industrial Production (IIP), grew by 2.2 per cent in March 2022.
Data released by the National Statistical Office (NSO) showed that the manufacturing sector output grew by 0.5 per cent in March 2023.
Mining production increased by 6.8 percent during the month under review. Electricity production declined by 1.6 in March. IIP to grow by 5.1 per cent in 2022-23 as against 11.4 per cent growth in 2021-22.
(With PTI inputs)
