Retail inflation was 6.95 per cent in March.
New Delhi:
India’s retail inflation rose to 7.79 per cent in April, mainly driven by rising fuel and food prices, government data showed on Thursday. The consumer price-based inflation data remained well above the Reserve Bank of India’s (RBI) upper tolerance limit for the fourth consecutive month.
In April, CPI inflation rose at its highest pace in eight years. The previous high was recorded in May 2014 at 8.33 per cent.
April’s print was up from 6.95 per cent in March and 4.23 per cent a year ago.
Inflation in the food basket rose to 8.38 per cent in April from 7.68 per cent in the previous month.
Food inflation, which accounts for nearly half of the consumer price index (CPI) basket, hit a multi-month high in April and is likely to remain high on the back of an increase in vegetable and cooking oil prices globally.
The rate of increase in retail inflation in the ‘fuel and light’ category increased to 10.80 per cent in April this year from 7.52 per cent in the previous month.
In the ‘oils and fats’ category, inflation hit a high of 17.28 per cent in April as Ukraine is one of the world’s leading sunflower oil producers and India imports a major chunk of the commodity from the war-ravaged country. In addition, Ukraine is also a major supplier of fertilizers to India.
Inflation in vegetables stood at 15.41 per cent during the month as against 11.64 per cent in March.
The RBI primarily considers retail inflation data while arriving at its bi-monthly policy decisions.
The Center has ordered the Reserve Bank to keep the retail inflation rate between 2 percent and 6 percent.
The elevated price outlook prompted the RBI to hike its repo rate for the first time in four years, raising it by 40 basis points (bps) to 4.40 per cent in an off-cycle meeting earlier this month. Repo rate is the rate at which RBI lends money to commercial banks.
On the global front, the US Federal Reserve also increased its interest rate by 50 bps, the highest in 22 years.
Central banks have also indicated future rate hikes to quell rising inflation.
Another set of government data showed that factory output grew by 1.9 per cent in March this year.