In April 2023, India’s CPI inflation drops precipitously to 4.7 percent, falling below the Reserve Bank of India’s (RBI) 6% maximum tolerance level. This indicates that the RBI would either delay further rate increases or lower rates when inflation falls below its upper goal.
The retail inflation rate fell to its lowest level in the previous 15 months in March and fell below the RBI’s 6% upper limit tolerance. In March 2023, the reported rate was 5.66 percent as compared to 6.95 percent the year before. The consumer price inflation was 7.78 percent in April of last year.
Since January 2022, inflation has exceeded the RBI’s 6 percent upper tolerance limit. Which prompted the central bank to pursue aggressive rate-hike measures from May 2022 to Feb 2023.
The sharp fall in food inflation is what causes the Consumer Price Inflation (CPI) to be lowering. The Consumer Food Price Index is 8.31 percent in April 2022 compared to 3.84 percent in April 2023. Food inflation in March 2023 was 4.79 percent.
In April 2023, the CPI was 178.1, while food inflation was 175.9.
Additionally, the inflation rate for food and drinks in April was 4.22 percent. While the rates for pan, tobacco, and other tobacco products were 3.46 percent.
India’s CPI Forecast
Textiles & shoes experienced an inflation rate of 7.48 percent. Additionally, housing inflation in April was 4.91%, while fuels & light inflation was 5.52 percent. The rate of other inflation was 4.92 percent.
According to statistics from the Ministry of Statistics & Programme Implementation. The price information was gathered by personal visits by field employees from the Field Activities Division of NSO, MoSPI on a weekly schedule from chosen 1115 urban marketplaces & 1182 villages covering all States/UTs.
In April 2023, the NSO received prices from 99.83 percent of towns & 98.56 percent of urban markets, with 89.90 percent of rural & 93.14 percent of urban markets reporting market-wise prices.
“The decrease in inflation figures is in line with projections, helped by a favourable base & the same is anticipated to continue in coming months,” stated Vivek Goel, Co-founder and Joint Managing Director, in reference to the most recent inflation print.
The most recent CPI reading for April was 4.7%, and core inflation decreased to 5.3%, providing the Monetary Policy Committee with a respite before its next policy meeting in June to maintain the rate rise hold.
Having said that, MPC will keep an eye out for concerns related to oil price volatility and inclement weather’s impact on food inflation.
Additionally, Nish Bhatt, the founder and CEO of Millwood Kane International, stated that. “A consistent trend of crude oil price and a strong monsoon year will assist keep inflation in check moving forward.
This is the final inflation reading before the MPC’s review meeting in June. The change will make it easier for the central bank to maintain its extended halt.
While keeping an eye on the inflation readings, the Reserve Bank of India strategically paused the rate increase cycle in its Apr 2023 decision.
The policy repo rate of the the Reserve Bank of India is 6.51 percent at the moment. It then maintained the Bank Rate at 6.75 percent as well as SDF rate & MSF rate at 6.25% each.