India’s Retail Inflation Soars To 7.79% In April 2022, Higher Than Most Estimates

India's retail inflation, measured by the Consumer Price Index (CPI) surged to 7.79% in the month of April due to rising fuel and food prices, according to the data released by the statistics ministry.

The rise in the retail inflation was anticipated following a hike fuel prices after state polls earlier this year in March. The hike in the energy prices all across the globe ever since Russia-Ukraine war broke out also contributed to the rise in inflation.

The official upper tolerance limit of CPI inflation is 6% and it has been breached consecutively for the last three months. It was registered 6.01 % in January, 6.07 % in February, and 6.95 % in March.

According to Bloomberg's poll, the rise in the inflation was expected to hover in the range of 7.43%. Meanwhile, other economists expected the figure to remain in the range of 8%. Today's reading is expected to add pressure on the RBI to act faster.

Earlier, Reserve Bank of India Governor Shaktikanta Das said in his unscheduled meet of the Central Bank that took place on May 4 that retail inflation is likely to be elevated.

The Monetary Policy Committee or MPC of Central Bank conducted an impromptu meet on May 2 and May 4 to declare a hike of 40 basis point in Repo Rate along with a 50 basis point rise in Cash Reserve Ratio or CRR. The current Repo Rate stands at 4.4% and CRR at 4.5%.

The RBI is scheduled to meet next on June 6 and economist believe that inflation is not likely to be tamed in the near future. They expect that the monetary policy may be tightened further.