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India Inflation Seen Near 3.8%–3.9% in April on Energy and Food Pressures

The RBI signals a pause, awaiting the May 12 reading to gauge how higher energy costs are feeding into prices.

Overview

  • Economist surveys this week point to CPI rising to about 3.8% to 3.9% year on year in April, up from 3.4% in March.
  • Higher energy costs are starting to filter through as LPG and aviation fuel prices rose after supply strains linked to the West Asia conflict.
  • Food prices likely firmed as vegetables, edible oils, eggs, and ready-to-eat items got costlier during a spell of heat and untimely rain.
  • The Reserve Bank of India kept the policy rate at 5.25% in April, and Governor Sanjay Malhotra says the bank is in wait-and-watch mode.
  • Wholesale inflation is seen near 4.40% in April, a gauge that tends to move first when global commodity prices jump.