April retail inflation eases to 3.16%, lowest since July 2019

April retail inflation eases to 3.16%

India's annual retail inflation slowed to 3.16% in April from 3.34% in March, marking its lowest in nearly six years as food prices rose at a slower pace, government data showed on Tuesday.

It is the lowest year-on-year inflation since July 2019, the government said in a statement.

Food inflation eased to 1.78% in April from 2.69% in the previous month. Vegetable prices fell 11% year-on-year, compared to a 7.04% fall in March.

Prices of cereals rose 5.35% against a 5.93% increase in March, while those of pulses fell 5.23% compared to a 2.73% fall in the same period.

"Inflation inched down to 3.16% in April on the back of a continuous broad-based drop in food prices, including of vegetables, cereals and pulses. The CPI print today sets the stage for another rate cut by the RBI (Reserve Bank of India) in its June meeting, of 25 basis points."

"Looking ahead, inflation is expected to remain close to 3% over the coming two months. The expectation of an above-normal monsoon and low commodity prices bodes well for the inflation trajectory through the year. We expect inflation to average at 3.7% in fiscal 2026," said Sakshi Gupta, principal economist, HDFC Bank, Gurugram.

"Along our expectations, April inflation remained below 4% for a third successive month, slowing from March's 3.4% to 3.2% year on year."

"Even as food perishables fell by a lesser extent than in March amidst a shift in weather conditions, the sequential momentum was better contained than last year. A pullback in global energy prices and a firmer currency kept imported pressures in check. We don't expect any spillover risk to inflation from recent geopolitical developments," said Radhika Rao, senior economist, DBS Bank, Singapore.

The Reserve Bank, which has been mandated to ensure inflation remains at 4% with a margin of 2% on either side, has slashed the key interest rate by 50 basis points in two tranches as the price situation improved.

The central bank has projected the CPI inflation for the financial year 2025-26 at 4%, with Q1 at 3.6%; Q2 at 3.9%; Q3 at 3.8%; and Q4 at 4.4%.