Retail Inflation Rises to 3.5% in April Amid Food and Gold Price Increases
Retail inflation up a tad on rise in food, bullion prices
The Economic TimesImage: The Economic Times
Retail inflation in India reached 3.5% year-on-year in April, up from 3.4% in March, driven by rising food and bullion prices. Economists predict inflationary pressures may continue due to geopolitical tensions and energy costs, with the Reserve Bank of India expected to maintain its policy rate at 5.25% in June.
- 01Retail inflation hit a four-month high of 3.5% in April.
- 02Food inflation rose to 4.2%, with rural areas seeing higher rates.
- 03Economists expect inflation to remain near the RBI's target of 4%.
- 04The RBI is likely to keep the policy rate unchanged at 5.25%.
- 05Telangana recorded the highest state inflation at 5.8%.
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In April, India's retail inflation increased to 3.5%, marking a four-month high, compared to 3.4% in March. This rise is attributed to higher food and gold prices, as indicated by official data released on Tuesday. Food inflation specifically rose to 4.2%, with rural areas experiencing a higher rate of 4.3%. Economists, including Sakshi Gupta from HDFC Bank, anticipate further inflationary pressures due to ongoing geopolitical conflicts and rising energy costs. A ₹5 increase in petrol prices could potentially raise inflation by 20 basis points. The Reserve Bank of India (RBI) is expected to maintain its policy rate at 5.25% during its June meeting, as inflation remains close to its medium-term target of 4%. Notably, Telangana reported the highest inflation rate among states at 5.8%. The outlook for May suggests inflation could rise to 4.1%, depending on energy price adjustments.
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The rise in inflation could lead to increased costs for consumers, particularly in food and fuel prices, affecting household budgets.
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