NEW DELHI: Retail inflation, based on the consumer price index (CPI), edged up for the third consecutive month to 3.5% in April from 3.4% in March, driven by a rise in food prices, according to data released by the National Statistical Office (NSO) on Tuesday. The food index increased to 4.2% in April, up from 3.9% in the previous month. Fuel inflation decelerated sharply to 0.7% from 1.7%, despite ongoing tensions in West Asia.
Core Inflation and Key Drivers
Core inflation, which excludes food and fuel, remained below 4%. Data showed that inflation in the category 'personal care, social protection, and miscellaneous goods and services' slowed to 17.7% from 18.6%, driven by a slight moderation in gold and silver prices and personal care items.
"Core inflation also rose only modestly, suggesting that manufacturers across sectors such as plastics, pharmaceuticals, and personal care products continue to absorb a significant part of the increase in input costs," said Debopam Chaudhuri, chief economist at Piramal Finance.
Restaurant Services and Regional Trends
Restaurant services witnessed a sharp acceleration in inflation to 4.2% from 2.9% during this period. "This was a fallout of higher LPG prices for these establishments, which led to higher prices being charged," said Madan Sabnavis, chief economist at Bank of Baroda. Prices in rural areas rose at a sharper pace of 3.7% compared to 3.2% in urban areas.
Consumer Durables and Outlook
Data showed a decrease in prices of consumer durables such as cars (down 7.1%) and air conditioners (5.1% lower). Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, noted that while the April inflation reading came in softer than expected, the outlook remains clouded with upside risks.
