Retail inflation slightly eased to 4.83% in April from 4.85% in March, staying within the RBI's 2-6% tolerance range, as per government data released on May 10, 2024.

In line with expectations of economists surveyed by Reuters, the inflation rate was anticipated to decrease marginally to 4.80%.

The National Statistical Office (NSO) reported a rise in food basket inflation to 8.7% in April from 8.52% in March. Vegetable inflation dipped slightly to 27.80% year-on-year, while inflation rates for cereals and pulses were recorded at 8.63% and 16.84%, respectively.

Fuel and light inflation experienced a decrease of 4.24% in April.

The inflation rates for Clothing & Footwear and Housing were recorded at 2.85% and 2.68%, respectively.

DK Srivastava, Chief Policy Advisor at EY India, commented on the downward trend in CPI inflation since December 2023, highlighting the potential for marginally lower CPI inflation in the first quarter of FY25 compared to RBI's projection of 4.9%.

The RBI's Monetary Policy Committee (MPC) maintained the policy repo rate at 6.5% for the seventh consecutive time in its April 5 announcement. The central bank's latest forecast projects CPI inflation to be 4.5% for the current financial year.

Analysts suggest that while unchanged inflation readings provide relief to the MPC, caution remains due to erratic weather patterns and heatwaves. Therefore, a prolonged pause in policy rates is expected to persist for now.