Consumer Price Index (CPI) or retail inflation in April 2019 rose to 2.92 percent as against 2.86 percent in March.

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The data released by the Central Statistics Office (CSO) showed that food inflation was at 1.1 percent in April against 0.3 percent in March on a month-on-month basis.

Vegetable inflation at stood 2.87 percent against -1.49 percent in March.Fuel and light inflation rose/fell to 2.56 percent from 2.42 percent in March.

In a poll conducted by CNBC-TV18, the April inflation rate was expected to harden from the 5-month high in March 2019 at 2.86 percent. It is expected to be in the range of 2.99 percent to 3.1 percent.

The rise in the April inflation rate is due to the increasing vegetable prices. Food inflation is likely to harden to around 1.5 percent on a year-on-year basis as compared to 0.3 percent in March.

Moreover, fuel and power inflation was expected to rise month-on-month due to higher liquified petroleum gas (LPG) prices.

source: tradingeconomics.com

In the first bi-monthly monetary policy meet of the financial year, the Reserve Bank of India cut the key repo rate by 25 basis points to 6 percent, with retail inflation continuing to remain low and domestic economy showing muted growth prospects. The repo rate is back at 6 percent after a year.

CPI is seen at 2.9 percent in the first quarter of FY20, 3 percent in the second quarter of FY20, 3.5 percent in the third quarter of FY20 and 3.8 percent in the fourth quarter of Q4FY20

CPI is widely used as a macroeconomic indicator of inflation, as a tool by governments and central banks for inflation targeting and for monitoring price stability, and as deflators in the national accounts.

First Published:May 13, 2019 5:33 PM IST