Retail Inflation Hits 6-Year Low, Eases RBI's Concerns
Retail inflation in April reached a nearly 6-year low of 3.16%, primarily due to lower vegetable, fruit, and protein prices. The Reserve Bank's comfort zone benefits from the decline, and key interest rates were reduced by 50 basis points. The CPI inflation projection is set at 4% for 2025-26.
- Country:
- India
In a significant development, India's retail inflation dropped to its lowest in nearly six years, recording a rate of 3.16% in April. This decline has been largely attributed to reduced prices in vegetables, fruits, pulses, and other protein-rich foods.
The Consumer Price Index (CPI) showcased a decline from the previous month's 3.34% and set a stark contrast to April 2024's 4.83%. In July 2019, it had hit a similar low at 3.15%.
The decreased food inflation rate for April, at 1.78%, reflects a downtrend from 2.69% in March and a considerable drop from 8.7% the previous year. The Reserve Bank, aiming to maintain inflation at 4% with a 2% margin, has responded by slashing interest rates by 50 basis points across two phases.
(With inputs from agencies.)
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