India’s retail inflation inched up in April to 2.92% from 2.86% a month ago, even though it remained well within the target of the Reserve Bank of India (RBI). Modest inflation and growing concern over growth may force the RBI to go for another round of rate cut in June.
Vegetable price inflation which turned positive last month grew 2.87% in April, while overall food and beverages inflation stood at 1.38% during the month.
With the economy projected to slow down in the fourth quarter, the RBI’s focus has shifted from inflationary concern to sustaining the growth momentum since its February policy review, when it began cutting the repo rate and changed its stance to neutral from calibrated tightening.
The Reserve Bank of India cut the policy rate by 25 basis points for the second consecutive time in April as concern over growth loomed larger than those surrounding inflation.
CRISIL Research in a report released on Monday said it expects headline inflation, measured by the Consumer Price Index (CPI), to rise 60 basis points (bps) to 4% in 2019-20 from 3.4% in 2018-19