CPI inflation has fallen for third month in a row and has come at 4.70% in April, 2023. This is the second month in a row that retail inflation has remained within tolerance band of the Reserve Bank of India. On the back of low inflation in vegetables, oil and fats and meat and fish, retail inflation has fallen for third month in a row. Both rural and urban inflation have fallen to lower than 5%. In fact, inflation has fallen by more than 1% in April as compared the preceding month.
Commenting on the inflation figures, RBI governor Shaktikanta Das said the cooling off in headline inflation is “very satisfying”. He said this indciates that the monetary policy is on the right track. He, however, declined to comment if the release of the numbers will lead the RBI to be less hawkish or change the stance of the policy, quipping that all of it will be clear on the morning of June 8, when the next policy review is scheduled.
According to the National Statistical Office, the inflation in the food basket was 3.84 per cent in April, versus 4.79 per cent in March and 8.31 per cent in the year-ago period. Retail inflation rose from 5.7 per cent in December 2022 to 6.4 per cent in February 2023 on the back of higher prices of cereals, milk and fruits and slower deflation in vegetable prices. Reserve Bank of India has projected the CPI inflation at 5.2 per cent for FY2023-24, with 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, and risks evenly balanced.
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