Retail inflation in Apr at 8-year high at 7.79%

OVERALL RETAIL PRICES ROSE HIGHER IN RURAL INDIA (8.38%), AGAINST 7.09% IN URBAN INDIA VEGETABLE PRICES ROSE 15.41% FROM 2021 AGAINST 11.64% IN MARCH

NEW DELHI: India’s consumer inflation surged to an eightyear high of 7.79% in April, 2022, breaching the Reserve Bank of India’s so-called tolerable limit of 6% for the fourth straight month driven by sharp increases in food prices, official data Thursday showed. Food inflation rose 8.38%, the highest so far in this fiscal.

The continued surge in shopend prices will pile more pressure on the Reserve Bank to act more aggressively to check inflationary pressures, which have squeezed average household budgets.

According to latest inflation numbers, overall retail prices rose higher in rural India (8.38%), while in urban India, they rose 7.09%. Food prices too increased faster in the countryside at 8.50%, compared to 8.09% in urban areas.

Retail inflation in March had risen 6.95%, while in February, it had risen 6.07%. The latest jump in prices is higher than what most analysts expected.

Russian invasion of Ukraine and the US Fed’s withdrawal of easy money policy have had a bearing on domestic prices in India.

The Black Sea conflict, along with Indonesia’s ban on cooking palm oil exports, quickened inflation in fats and oils to a record 17.28%, Thursday data showed. Vegetable prices rose 15.41% from a year ago against an increase of 11.64% in the previous month, while proteins fell to 6.97, against a rise of 9.6% in March.

Global shocks plunged the Indian rupee to a record new low Thursday, as worries of runaway inflation mount. The rupee fell 0.5% to 77.6313 per dollar on Thursday, a new record low for the second time in a week. Stocks tumbled too as the benchmark Sensex Index fell 1.8%, a two-month low.