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India April retail inflation rate climbs for first time in four months

Reuters  |  NEW DELHI 

By Kumar

NEW DELHI (Reuters) - India's annual accelerated in April, mainly due to higher fuel and prices, and in response some economists changed their views to expect a more at its next policy meeting next month.

The (RBI), due to hold its next policy meeting on June 6, is still widely expected to hold rates after having kept them unchanged for the fourth straight meeting in April.

But with a faster-than-expected pace of retail and wholesale inflation, some economists have changed their mind about the RBI's next policy move.

"The is likely to adopt a hawkish commentary in June," said Radhika Rao, an at in

India's accelerated in April to 4.58 percent, after easing for three straight months, government data showed on Monday, mainly driven by faster increases in and fuel prices.

Core inflation, mainly reflecting firming up manufacturing prices touched 5.9 percent, at a 44-month high, economists estimated.

Analysts polled by had forecast April's inflation at 4.42 percent, compared with March's 4.28 percent.

April was the sixth straight month in which inflation was higher than the RBI's medium-term target of 4 percent.

India's wholesale price inflation in April rose faster than expected, to 3.18 percent, separate data released by the on Monday showed.

inflation, which contributes about half of the weight in the index, rose 2.80 percent in April almost at the same level of 2.81 percent rise in the previous month.

Analysts worry that could cross 5 percent mark in the next two to three months.

As the economy gathers momentum, capacity utilisation could tighten further, which will boost underlying price pressures, said of in a note on Monday.

The biggest risk that Asia's third-largest economy faces is rising crude prices, which hit $78 a barrel last week, their highest since November 2014 following prospects of new U.S. sanctions on

meets 80 percent of its needs from imports.

An increase in price of $10 a barrel could quicken inflation by about 1 percentage point and reduce economic growth by 0.2 to 0.3 percentage points, a told Reuters, before the release of the Monday's data.

The International Monetary Fund, however, expects India's economic growth could rebound to 7.4 percent in fiscal year 2018/19 beginning April, from an estimated 6.6 percent in the previous fiscal year.

(Reporting by Kumar; Editing by and Robert Birsel)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, May 14 2018. 18:40 IST