India witnessed a moderation in its retail inflation rate for the month of April 2024. According to the latest figures released by the Ministry of Statistics and Programme Implementation (MoSPI), the annual inflation rate, based on the all-India Consumer Price Index (CPI) numbers, stood at 4.83 per cent (Provisional) for April 2024 compared to the same period last year.
This marks a slight decrease from the preceding months, where the inflation rates for January, February, and March 2024 were reported at 5.10 per cent, 5.09 per cent, and 4.85 per cent respectively.
The breakdown of inflation rates for rural and urban areas reveals that while rural inflation was recorded at 5.43 per cent, urban inflation stood at 4.11 per cent for April 2024. Notably, there has been a decrease in year-on-year inflation rates for key sectors including 'Clothing & Footwear', 'Housing', and 'Fuel & Light' compared to the previous month.
The data collected from selected urban markets and villages across all states and union territories highlights a comprehensive representation of the consumer price trends. During April 2024, price data was collected from 99.9 per cent of villages and 98.5 per cent of urban markets, with reported market-wise prices at 89.8 per cent for rural areas and 93.2 per cent for urban areas.
In terms of sector-specific inflation, the data indicates varied trends. Notably, the year-on-year inflation rates ( per cent) for major groups such as 'Food and Beverages', 'Clothing and Footwear', 'Housing', and 'Fuel and Light' stood at 7.87 per cent, 2.85 per cent, 2.68 per cent, and -4.24 per cent respectively.
Furthermore, the Consumer Food Price Index (CFPI), which is based on ten sub-groups excluding 'Non-alcoholic beverages' and 'Prepared meals, snacks, sweets etc.', recorded a year-on-year inflation rate of 8.70 per cent for April 2024.
The moderation in retail inflation comes amidst various economic indicators and policy measures aimed at stabilising the economy and controlling price pressures. It reflects a nuanced understanding of consumer spending patterns and market dynamics, providing valuable insights for policymakers and stakeholders alike.
Looking ahead, the next release for the CPI data for May 2024 is scheduled for June 12, 2024. As India navigates through economic challenges and strives for sustainable growth, the trajectory of retail inflation remains a critical factor influencing monetary and fiscal policies.
Sanjeev Agrawal, President, PHD Chamber of Commerce and Industry has appreciated the continuous softening of CPI inflation to 4.83 in April, 2024.
In the recent months, inflation has come down significantly due to continuous softening in housing inflation from 3.2 per cent in January 2024 to 2.6 in April 2024, fuel and light from -0.6 per cent in January 2024 to -4.2 per cent in April 2024, clothing and footwear categories from 3.3 per cent in January 2024 to 2.8 per cent in April 2024 and pan, tobacco and intoxicants from 3.2 per cent in January 2024 to 2.9 per cent April 2024. However, inflation is still sticky in food and beverages at 7.8 in April 2024, said Agrawal.
Proactive measures by the Government to strengthen the supply chains are leading to softening of inflation in many items, he said.
Going forward, inflation trajectory is expected to become normal by September/October 2024 as many of the kharif crops will be entering the mandis and supplementing the existing supply, said Sanjeev Agrawal.
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank said, “Unchanged headline and core inflation reading from previous month will continue to provide respite to the MPC. However, erratic weather and heatwaves should keep the overall sentiment cautious. We do not expect much change to RBI’s narrative for now, as a prolonged pause in policy rates remains the base case.”
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