New Delhi [India], May 13 (ANI): The Consumer Price Index (CPI) Inflation for April 2022 is 7.79 per cent higher as against 6.95 per cent in March this year and 4.23 per cent in April last year, according to the government data.
Retail inflation of 7.79 per cent is at a record high in 19 months as the previous highest number was 7.61 per cent recorded in October 2020.
The surge in inflation is largely driven by rising fuel and food prices, government data showed on Thursday.
The consumer price-based inflation figure stayed well above the Reserve Bank of India’s (RBI’s) upper tolerance limit for a fourth consecutive month. RBI has been mandated by the Centre to keep the retail inflation between 2 per cent to 6 per cent.
Food inflation, which accounts for nearly half the consumer price index (CPI) basket, reached a multi-month high in April this year and can remain elevated due to higher vegetable and cooking oil prices globally. RBI mainly considers the retail inflation figure while arriving at its bi-monthly policy decision.
Sunil Kumar Sinha, Principal Economist, India Ratings and Research said, “Based on the present trend, average inflation in FY23 is likely to be closer to 7 per cent and may peak in September 2022 thereafter declining marginally. RBI has increased the repo rate by 40bp and CRR by 50bp in May 2022. India Ratings expects monetary tightening to continue and expects repo rates to increase by 60-75bp and CRR by 50bp in FY23. However, India Ratings believes the future rate hikes will be data-dependent.”
Sachin Gupta, CEO of Share India Securities said, “Due to the ongoing geopolitical tensions and high commodity prices, it was expected that the inflation numbers will be on the higher side. Anticipating this, RBI has already started fiscal tightening by increasing the repo rate. With the global uncertainty continuing and commodity prices remaining high, the inflation numbers may witness upward pressure in coming months also.”
DK Mishra, an economist said, “What we see RBI will try to increase the repo rate further. There is one more possibility that RBI may increase the upper comfort level of inflation, to more than 6 per cent which can be accepted phenomenon for the time being to see that inflation will continue to trouble us in the short term time span.” (ANI)
