Retail inflation quickened to a six-month high of 2.92% in April, driven in large part by accelerating food and fuel inflation, according to official data released on Monday.
Growth in the consumer price index (CPI) quickened in April from 2.86% in March.
Within the index, growth in the food and beverages segment accelerated to 1.38% in April compared with 0.66% in March. Similarly, the fuel and light segment saw inflation quickening to 2.56% from 2.34% over the same period.
“CPI headline inflation came slightly below expectations, with core inflation seeing a welcome downside surprise, which is in tandem with the growing slack in the economy,” B. Prasanna, group head — global markets – sales, trading and research, ICICI Bank said.
“Moreover, food inflation continued to rise with sustained upward momentum in fruits and vegetables. We expect this trend to continue over the summer months.”
Inflation in the pan, tobacco and intoxicants eased to 4.27% in April from 4.61% in March. Similarly, the clothing and footwear segment saw inflation slowing to 2.01% from 2.52% over the same period.
The housing segment saw inflation slowing to 4.76% in April from 4.93% in March.
“Based on this reading and the slowdown visible in industrial production, we maintain our call of another rate cut in the August policy, with the action being dependent on realised outcomes of monsoons and trajectory of oil prices,” Mr. Prasanna added.