Retail inflation to be steady at 4.87% in April: Mint poll Pain point
India’s retail inflation is likely to have remained broadly unchanged at 4.87% in April, compared to 4.85% the previous month, a median estimate of 22 economists polled by Mint showed. Projections from the economists varied between 4.70% and 5.10%, with only four anticipating the inflation rate to exceed 5%.
The official data is set to be released on 13 May.
While food prices are expected to have risen since March, a favourable base effect could prevent year-on-year inflation from increasing significantly in April. “Price pressures are rising, particularly for food, which is largely seasonal. However, these will likely be offset by a favourable base. Core inflation should continue its recent pace of moderation,” Shreya Sodhani, regional economist, Barclays, said.
Even though inflation has significantly softened in recent months, it remains above the Reserve Bank of India's (RBI) medium-term target of 4%, keeping policymakers vigilant. RBI governor Shaktikanta Das had reiterated concerns about persistent volatility in food inflation, emphasizing the vulnerability of the inflation trajectory to supply-side shocks.
"The success of the disinflation process so far should not distractusfromthevulnerabilityof theinflationtrajectorytothefrequent incidence of supply-side shocks,”Dashadsaidduringthe April monetary policy meeting.
With the onset of summer, price pressures typically esca
Food price pressures are expected to have risen since MarchConsumer 2.99 4.87 late for perishable food items, particularly vegetables. However, if the India Meteorological Department's (IMD) forecast for an above-normal monsoon holds true, some relief may be expected.
“While the much awaited La Nina conditions are likely to improve monsoons, in the interim period, increasing instances of heatwaves around the country will be a spoilsport for the doves,” said Sujan Hajra, chief economist & executive director at Anand Rathi Shares and Stock Brokers.
He added that the forecast for the coming months remains uncertain. “With no signs of weather and geopolitics-related risks waning, the trajectory for inflation will remain bumpy, RBI will be cautious on its stance.”
Meanwhile, core inflation, which excludes food, fuel and light groups, is expected to have remained soft in April but could face potential risks from an upturn in global commodity prices in the coming months.
RBI governor Das had in April reiterated concerns about volatility in food inflation