Retail inflation at 2.99% in April, core inflation at 4.9%

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Retail inflation fell sharply to 2.99 per cent in April, from 3.89 per cent in March, due to lower cost of food items, including pulses and vegetables that showed a deflationary trend.

CPI inflation stood at 5.47 per cent in April 2016. Pulses and products recorded a sharp fall in prices in April, with a deflation of 15.94 per cent, while vegetable prices fell by 8.59 per cent. The corresponding figures for March read (-)12.42 per cent and (-)7.24 per cent.

In the fuel and light category, the inflation reading in April stood at 6.13 per cent, higher than 5.56 per cent in March.

Price of fruits grew at 3.78 per cent in April, slower than 9.35 per cent in March, showed data from the Ministry of Statistics and Programme Implementation (MOSPI), which were released today.

For cereals and products, the rate of price rise in April, at 5.06 per cent, was lower than 5.38 per cent in the previous month. For meat and fish, the inflation print came in at 1.90 per cent during the reported month, from 2.96 per cent in March.

Overall food inflation, or the rate of price increase, for April was at 0.61 per cent as against 1.93 per cent previously.

The consumer price index (CPI) based retail inflation for March 2017 was revised slightly upwards to 3.89 per cent, from 3.81 per cent recorded previously.

The consumer price index (CPI) inflation hovered around the Reserve Bank of India’s (RBI), medium-term target for retail inflation of 4 percent within a band of +/- 2 percent, while supporting growth.

In February, the apex bank had kept its key lending rate unchanged at 6.25 percent, and warned of a looming inflation threat over the next 6-12 months, obliquely leaving the door ajar for an interest rate hike in 2017-18.

For 2017-18, RBI has projected retail inflation to average 4.5 percent in the first half and 5 percent in the second half.

The latest price data released by the statistics office represents signs of a turnaround in shop-end sales, triggered by the unexpected ban on Rs 500 and Rs 1,000 currency notes in November, 2016.

The currency recall forced families to spend less, depressing the demand for some goods including perishable products since November, when the two notes were outlawed.

(With inputs from PTI)