Retail inflation eased to an 11-month low of 4.83 per cent in April as prices of some kitchen items declined though overall food basket firmed up marginally, according to a government data released on Monday. The Consumer Price Index (CPI)-based retail inflation was 4.85 per cent in March. It was 4.7 per cent in April 2023.
Increased production of pulses, oilseeds, and cereals will help boost domestic supplies and contribute to keeping inflation low in the coming months.
The US's recent 50 per cent tariff on Indian exports will have a trickledown effect on India's affordable housing, potentially derailing demand as well as supply in this segment, according to experts. Pointing to worker incomes and jobs in micro, small and medium enterprises (MSMEs), and small and medium enterprises (SMEs) that typically make up majority of the customer base of affordable housing, would take a hit in the near terms due to the tariff change, further crippling India's affordable housing sector, already reeling from the impact of the Covid-19 pandemic.
Retail inflation declined to a three-month low of 5.1 per cent in January, mainly due to subdued prices of vegetables, fruits and other food items, according to government data released on Monday. The fall indicates that retail inflation is inching towards the Reserve Bank's comfort level of 4 per cent. The Consumer Price Index (CPI) based inflation was on the rise for two straight months after touching a trough of 4.9 per cent in October 2023. In December, it stood at 5.69 per cent.
State Bank of India, Tech Mahindra, Larsen & Toubro, Tata Steel, Sun Pharma, Infosys, HCL Tech, Axis Bank, Tata Consultancy Services and NTPC were among the biggest laggards among Sensex shares. Nestle, Hindustan Unilever, Titan, Power Grid, UltraTech Cement and ITC were among the gainers.
The Survey is authored by Chief Economic Advisor V Anantha Nageswaran and his team.
India's economic growth forecast for 2025 has been revised downward to 6.3 per cent, and despite a projected moderation, the country remains one of the fastest-growing large economies, supported by resilient consumption and government spending, the United Nations has said.
Wholesale price-based inflation rose to a record high of 15.88 per cent in May on rising prices of food items and crude oil. The Wholesale Price Index-based inflation was 15.08 per cent in April and 13.11 per cent in May last year. "The high rate of inflation in May, 2022 is primarily due to rise in prices of mineral oils, crude petroleum & natural gas, food articles, basic metals, non-food articles, chemicals & chemical products and food products etc. as compared to the corresponding month of the previous year," the commerce and industry ministry said in a statement.
'Challenge is basically near-term growth as the outlook has turned a bit adverse.'
'The central bank has highlighted that the slowdown in growth has been limited to a few sectors and overall growth is expected to pick up in the second half of the year.'
S&P Global Ratings on Tuesday cut India's GDP growth projections to 6.5 per cent for the next fiscal as it expects that economies in the APAC region will feel the strain of rising US tariffs and pushback on globalisation. In its Economic Outlook for Asia-Pacific (APAC), S&P said despite these external strains, it expects domestic demand momentum to remain solid in most emerging-market economies.
The wholesale price-based inflation eased for the eighth consecutive month to 4.73 per cent in January on easing prices of manufactured items, fuel and power. The wholesale price-index (WPI) based inflation rate was 4.95 per cent in December 2022 and 13.68 per cent in January 2022. Inflation in food articles, however, rose to 2.38 per cent in January, from (-) 1.25 per cent in December, 2022.
The retail inflation eased to a four-month low of 4.87 per cent in October, mainly due to cooling prices of food items, government data showed on Monday. The Consumer Price Index (CPI) based retail inflation fell to a three-month low of 5.02 per cent in September. The previous low inflation was recorded at 4.87 per cent in June.
The move is to align affordable housing finance flows to the increase in property costs and inflation, says Raghu Mohan.
Wholesale price-based inflation rose to an eight-month high of 0.26 per cent in November, driven by a sharp jump in food prices, especially onion and vegetables. The WPI inflation was in the negative or deflationary zone for the past seven months since April and was at (-)0.52 per cent in October. The last positive WPI inflation was recorded in March at 1.41 per cent.
Led by a sharper-than-expected deceleration in industrial activity, economic growth in India slowed more than anticipated and is projected to remain at 6.5 per cent till 2026, the International Monetary Fund said on Friday. "Growth in India slowed more than expected, led by a sharper-than-expected deceleration in industrial activity," the IMF said in its latest update of the World Economic Outlook, according to which the global economy is holding steady. In 2023, India's growth rate was 8.2 per cent, which dropped to 6.5 per cent in 2024.
The Reserve Bank will hold a special meeting of its rate-setting committee on November 3 to prepare a report for the government on why it failed to keep retail inflation below the target of 6 per cent for three consecutive quarters since January. The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das will prepare the report on reasons for failure to meet the inflation target as well as the remedial measures the central bank is taking to bring down prices in the country. "Under the provisions of Section 45ZN of the Reserve Bank of India (RBI) Act 1934... an additional meeting of the MPC is being scheduled on November 3, 2022," RBI said in a statement on Thursday.
Indian growth in the rest of this fiscal year and next will be propelled by robust domestic consumption as consumer confidence improves, and by investment, including large increases in government capital expenditure, according to the Asian Development Outlook September 2023. "As slowing exports could foment headwinds for the economy, and erratic rainfall patterns are likely to undermine agricultural output, the growth forecast for FY2023 is revised down marginally to 6.3 per cent," ADB said.
The Reserve Bank of India on Thursday raised its inflation projection to 5.1-4.7 per cent for the second half of the current fiscal on the back of spike in prices of vegetables such as onion and tomatoes.
The Reserve Bank of India's (RBI's) job to bring down inflation is not over, and any premature move on the policy front could undermine the success achieved so far on the price situation, according to RBI Governor Shaktikanta Das. RBI's rate setting panel, Monetary Policy Committee (MPC), had met for three days from February 6-8. The panel decided to leave the key policy rate unchanged at 6.5 per cent for the sixth time in row.
The Reserve Bank of India (RBI) on Friday cut the repo rate by 25 basis points to 6.25 percent, marking the first reduction in five years. The central bank also projected GDP growth for fiscal year 2026 at 6.7 percent and inflation to come down to 4.2 percent in FY26 from 4.8 percent in FY25. The RBI said the global economic backdrop remains challenging but the Indian economy continues to remain strong and resilient.
Many high-profile IPOs in India since 2021 have destroyed investor wealth due to overvaluation, weak business models, and post-listing disinterest, turning 1 lakh investments into as little as 3,500.
Retail inflation hit an eight-month high of 6.07 per cent in February, remaining above the RBI's comfort level for the second month in a row, while wholesale price-based inflation soared to 13.11 per cent on account of hardening of crude oil and non-food item prices, government data showed on Monday. The previous high for retail inflation was 6.26 per cent in June 2021. The consumer price index (CPI) based retail inflation, which is taken into account by the Reserve Bank of India (RBI) while deciding its monetary policy, rose mainly because of costlier food items, as per the data released by the National Statistical Office (NSO).
Indian economy is gathering momentum in the second quarter, though inflation would continue to average above the central bank's comfort zone of 6 per cent, said an article in the RBI's monthly bulletin released on Thursday. The consumer price index (CPI) based retail inflation shot up significantly to 7.44 per cent in July, from 4.87 per cent in the preceding month, mainly due to soaring prices of tomato, vegetables and other food items. In his address to the nation on the Independence Day, Prime Minister Narendra Modi vowed to take more steps to contain price rise.
The highlights of RBI's bi-monthly monetary policy announced by Governor Shaktikanta Das:
India's consumer price index (CPI)-based inflation could ease in the coming months thanks to the arrival of kharif crops, lower international commodity prices, and a pass through of lower input costs to consumers, the finance ministry said in its Monthly Economic Review (MER) for October, which was released on Thursday. The MER, however, warned that the global macroeconomic situation remained precarious and a recession in many advanced economies would impact India's exports. "Easing international commodity prices and new Kharif arrival are set to dampen inflationary pressures in the coming months.
The Indian economy is recovering from the slowdown in momentum witnessed in the September quarter, driven by strong festival activity and a sustained upswing in rural demand, according to a Reserve Bank of India (RBI) bulletin released on Tuesday. An article on the 'State of the Economy' in the December bulletin noted that the global economy continues to exhibit resilience with steady growth and moderating inflation.
Retail inflation fell to a 15-month low of 5.66 per cent in March, mainly due to a decline in food prices, government data showed on Wednesday. The inflation figure in March is within the RBI's comfort zone as it is below 6 per cent. The retail inflation based on Consumer Price Index (CPI) was 6.44 per cent in February 2023 and 6.95 per cent in the year-ago period.
The World Bank on Wednesday lowered India's growth forecast for the current fiscal by 4 percentage points to 6.3 per cent amid global economic weakness and policy uncertainty. In its previous estimate, the World Bank had projected India's growth at 6.7 per cent for the fiscal year 2025-26.
Snapping its declining trend, retail inflation rose to a three-month high of 5.55 per cent in November on firming food prices, including vegetables and cereals, though it remains within the RBI's comfort zone of less than 6 per cent. Inflation based on the Consumer Price Index (CPI) was 4.87 per cent in October and 5.88 per cent in November 2022, the government data released on Tuesday showed. The previous high was 6.83 per cent in August and inflation had been on a decline since then.
'The government's priority is not farmers.'
India is well-positioned to deal with the negative effects of US tariffs and global trade disruptions as domestic growth drivers and low dependence on exports anchor the economy, Moody's Ratings said on Wednesday.
Retail inflation declined to 6.83 per cent in August after touching a 15-month high of 7.44 per cent in July, mainly due to softening prices of vegetables, but still remains above the Reserve Bank's comfort zone. The overall inflation in the food basket stood at 9.94 per cent in August as against 11.51 per cent in July, according to data released by the National Statistical Office (NSO) on Tuesday. Retail inflation based on the Consumer Price Index (CPI) was at 7 per cent in August 2022.
The commerce ministry on Friday held consultations with key stakeholders, including shipping lines, exporters, container firms, and other departments, to assess the impact of the Iran-Israel conflict on India's overseas trade, an official said. The meeting was chaired by Commerce Secretary Sunil Barthwal.
'An eerie similarity with 2019 inflation trajectory could now mean that the RBI and market inflation estimates could go awry.'
India will be the world's third-largest economy by 2028 as it becomes the world's most sought-after consumer market and gains share in global output, driven by macro stability influenced policy and better infrastructure, Morgan Stanley said. From a $3.5 trillion economy in 2023, the Indian economy is projected to expand to $4.7 trillion in 2026, which will make it the fourth largest in the world behind the US, China and Germany.
Moody's Ratings on Wednesday said India's economic growth will exceed 6.5 per cent in the next fiscal, up from 6.3 per cent this year, on higher government capex and consumption boost from tax cuts and interest rate reduction. Projecting a stable outlook for the banking sector, Moody's said although the operating environment of Indian banks will remain favourable in the next fiscal, their asset quality will deteriorate moderately after substantial improvements in recent years, with some stress in unsecured retail loans, microfinance loans and small business loans.
The RBI is fully aware that the high-cost loans and high indebtedness of the borrowers could pose financial stability risks, if not addressed by these NBFCs. Governor Shaktikanta Das has issued a stern warning, saying the RBI is closely monitoring these areas and will not hesitate to take appropriate action, if necessary, if the culprits don't opt for self-correction. Watch out for some action, soon, notes Tamal Bandyopadhyay.
Earlier, the apex bank had projected inflation at 5.5 per cent by March 2011 and the latest higher estimate is on account of high food, fuel prices high and persistent demand pressures building up in the economy.
'There are occasions when the prices of individual items like food raise inflation; then supply-side measures must be taken.' 'But if there is continued inflation, it means liquidity is aggravating the situation.'
