Positive rate of inflation in April, 2025 is primarily due to increase in prices of manufacture of food products, other manufacturing, food articles, electricity and manufacture of textiles etc, as per the government.
Primary articles inflation in April contaracted to 1.44% from a growth of 0.76% in March. Inflation rate for fuel and power contracted 2.18% in April as against a growth of 0.20% in March.
Meanwhile, India’s retail inflation dropped to a 69-month low of 3.16% in April, down from 3.34% in March.
RBI’s inflation outlook
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) in April said that the inflation has declined, supported by a favourable outlook on food and is expected to moderate in FY26, offering further relief to Indian households.
RBI‘s MPC has forecast inflation at 4% for the fiscal year 2025-26, as against 4.2% forecasted in the February meeting.For the four quarters of FY26, the RBI MPC has projected inflation to be at 3.6% in the first quarter; Q2 at 3.9%; Q3 at 3.8% and Q4 at 4.4% with risks evenly balanced.”MPC noted that inflation below the target currently, supported by huge fall in food prices. Moreover, there s decisive improvement in inflation outlook. As per projections, there is now greater confidence of durable alignment of headline inflation with target of 4% over 12 months horizon,” said RBI Governor Sanjay Malhotra.
Economic Survey and inflation risks
The Economic Survey for 2024-25, released earlier in January, projected that food inflation would soften in the final quarter of FY25. However, the report also cautioned that global uncertainties continue to pose risks to India’s economic stability.
Factors such as a weakening rupee, global economic uncertainity, inflation volatility, and declining foreign investment remain key macroeconomic challenges.
Content Source: economictimes.indiatimes.com