Wholesale inflation in April rose to 13-month high of 1.26% on spikes in power, food prices

This figure aligns with the Reserve Bank of India's comfort zone of 2-6 per cent

Digital Desk: India saw a slight dip in retail inflation in April, hitting an 11-month low of 4.83 per cent compared to 4.85 per cent in the preceding month, as per government data released on Monday by Commerce Ministry. A Reuters poll of 44 economists had anticipated a slight decrease to 4.80 per cent.

Reserve Bank of India (RBI) Governor Shaktikanta Das, during the announcement of the outcomes of the first bi-monthly Monetary Policy Committee (MPC) meeting of FY25, highlighted inflation as a significant challenge, metaphorically calling it "the elephant in the room." He expressed optimism, indicating that inflation, like an elephant, seems to be retracing its steps toward the desired threshold of 4 per cent.

Governor Das noted the downward trajectory of inflation, primarily due to favourable base effects. However, he acknowledged persistent pressure from service prices, keeping the key indicator at an elevated level compared to the targeted thresholds.

Inflation for January-February 2024 witnessed a decline to 5.1 per cent from December's 5.7 per cent. Nonetheless, the fluctuating food prices continue to contribute to inflation uncertainties.

Governor Das stated, "Headline inflation has eased from its December peak; nevertheless, the persistent pressure from food prices is impeding the ongoing disinflation process, presenting obstacles to achieving the target."

Despite uncertainties like a spike in crude oil prices and concerns about supply chains due to the Red Sea crisis, the MPC maintained its inflation forecast for the fiscal year at 4.5 per cent, assuming a normal monsoon.