India’s retail inflation cooled to 3.16% in April, down from 3.34% in March—its lowest level in six years.
That marks six straight months of easing, putting it comfortably below the RBI’s 4% comfort zone.
Why it matters: a lower CPI generally means prices of goods are coming down. This could be because demand is weak or things are generally less expensive. This gives RBI some leeway to cut rates, in order to stimulate the economy and drive demand up. Its a setup that investors tend to love.
- CPI, or Consumer Price Index, tracks the change in prices of everyday goods and services. It’s a key measure of inflation that reflects how much the cost of living is rising, or falling, for the average consumer.
Once again, food did the heavy lifting.
- Food inflation fell to 1.78%, its lowest since October 2021, down from 2.69% in March.
- Vegetable prices plunged to -10.98% from -7.04% in March.
- Pulses slipped further into deflation at -5.23%, vs -2.73% in March.
Meanwhile, core inflation (excluding food and fuel) stayed sticky, thanks to rising gold prices driven by global tensions—gold hit a record $3,498.24 on April 22.
With inflation at its softest in nearly 5 years, the RBI has a wide runway to cut rates or keep them low, without the fear of runaway prices. That means good news for borrowers and more fuel for growth.
