CPI inflation for April hits three-month high of 8.59% on higher food prices

Driven by higher food prices, the provisional annual inflation rate based on all India general Consumer Price Index (CPI) (Combined) rose to three months high of 8.59% from 8.31% in March. According to the data, CPI numbers of March 2014 for Rural, Urban and Combined stood at 140.6, 137.2 and 139.1 respectively. The corresponding provisional inflation rates for rural and urban areas for April 2014 stood at 9.25% and 7.69% as compared to 8.89% and 7.51% respectively in the previous month. Food prices for consumers rose at 9.66% in last month from a year earlier, higher than March’s 9.10% rise.  The Provisional annual inflation rates of April 2014 for Rural and Urban in respect of ‘food and beverages’ stood at 10.45% and 8.24% for month under review compared to 9.95% and 7.47% respectively in March, 2014. Additionally, Provisional annual inflation rates (Combined) for Fuel and light; Clothing, bedding and footwear stood at 5.96% and 8.83% respectively for the month of April.  However, the core consumer price index (CPI) eased modestly to 7.80% in April from a year earlier and from a 7.82% in March. This is a bit of positive since core inflation for the past few months has remained below 8%, a level Reserve Bank of India’s (RBI) chief Raghuram Rajan deems uncomfortably high. However, latest reading adds to woes of policy maker, which will review its monetary policy next on June 3, 2014. India has been battling a prolonged spell of high inflation and low growth. While economic growth has almost halved to below 5% for the past two years, the worst slowdown for the South Asian nation since the 1980s, inflation too is not showing any signs of receding.