According to data released by the Ministry of Statistics, India’s retail inflation reached an eight-year high of 7.79 per cent in April, exceeding the Reserve Bank of India’s (RBI) target for the fourth time in a row. And implementation of the program on Thursday. The surge is largely driven by rising fuel and food prices.
The RBI has been forced by the government to keep retail inflation at 4 per cent and has a margin of 2 per cent on both sides.
CPI-based inflation stood at 6.95 per cent in March, 6.07 per cent in February and 6.01 per cent in January. In April 2021, the inflation rate stood at 4.23 percent.
Food inflation rose to 8.38 percent in April from 7.68 percent a month earlier and 1.96 percent a year earlier.
The local price of oil, India’s largest importer, has been under upward pressure since the rupee fell nearly 4 percent this year, hitting a record high against the US dollar on Monday.
The upward price outlook has pushed the RBI – which has recently shifted its focus from price growth to price stability – to raise its repo rate for the first time since 2018, raising it by 40 basis points to 4.40 percent at a surprisingly unscheduled meeting last week. More expected to follow.
The move comes just days before the US Federal Reserve’s 50 basis point rate hike.
“April’s CPI inflation came in above expectations due to headline items such as food, cooking gas and petrol. In food, it is primarily vegetables and cereals. , Chief Economist, Axis Capital 8
“This is the highest CPI print since May 2014 (8.3%) almost eight years ago. Financial housing was called for a quick withdrawal and called for fairness. The RBI’s off-cycle rate hike last week was preceded,” he added.
HDFC Bank chief economist Sakshi Gupta said, “Overall, inflation readings are expected to be above 7% in the next 6-7 months. The RBI may respond to the rate hike at its June 25 meeting. Follow this up with increasing rates as you move to% pre-epidemic levels. “
Meanwhile, the country’s industrial production, measured by the Index of Industrial Production (IIP), fell 1.9 percent in March from 24.2 in the same month a year earlier, the NSO said.
In March 2022, output of the manufacturing sector increased by 0.9 percent.
Mining output increased 4 percent, and power generation increased 6.1 percent
In 2021-22, IIP grew 11.3 percent, compared to 8.4 percent contraction in 2020-21.
Industrial production has been affected by the coronavirus epidemic since March 2020, when it shrunk by 18.7 percent.
It shrunk by 57.3 percent in April 2020 due to a drop in economic activity in the wake of a lockdown imposed to prevent the spread of coronavirus infection.