Inflation slows to 18-month low

NEW DELHI: Retail inflation moderated to an 18-month low in April on the back of a favourable base effect and softening in some food prices, bringing much-needed relief from stubborn price pressures, but industrial output growth slowed to a 5-month low in March as manufacturing growth eased and the electricity segment contracted.
Data released by the National Statistical Office (NSO) on Friday showed retail inflation, as measured by the consumer price index (CPI), rose an annual 4.7% in April, lower than the previous month’s 5.7% and below the RBI‘s upper tolerance limit of 6%. The food price index slowed to 3.8% in April from 4.8% in March. Urban inflation was higher at 4.9% while rural was at 4.7%.

The data showed that prices of several key food and other items moderated except for some pressure on cereals, spices, personal care products and clothing and footwear. Economists said the RBI is expected to continue with its pause on interest rates and assess the impact of its earlier hikes. They also said the inflation trajectory going ahead would be shaped by the monsoon rain distribution and the impact of the El Nino weather factor.
Separate data showed the Index of Industrial Production (IIP) growth slowed to 1.1% in March, compared to 5.8% in the previous month and lower than the 2.2% in March 2021-22. Manufacturing sector growth slowed to 0.5% in March compared to 1.4% expansion in the year earlier period while the electricity sector contracted 1.6% during the month compared to a growth of 6.1% in March 2021-22.