Retail inflation falls to near 6-year low of 3.16pc in April, signals economic stability

THEBUSINESSBYTES BUREAU

NEW DELHI, MAY 13, 2025

In a significant boost to economic sentiment, India’s retail inflation dipped to a near six-year low of 3.16 per cent in April, according to official data released on Monday. The sharp decline is largely attributed to easing prices of food items, particularly vegetables, fruits, and pulses, offering relief to households and signalling macroeconomic stability.

The Consumer Price Index (CPI)-based inflation was recorded at 3.34 per cent in March and a higher 4.83 per cent in April 2024. The latest figure is the lowest since July 2019, when inflation stood at 3.15 per cent.

Food inflation — a key component impacting daily expenses — fell significantly to 1.78 per cent in April, compared to 2.69 per cent in the previous month and a steep 8.7 per cent in April last year. Analysts say the decline reflects improved supply chains and effective price management strategies.

The moderation in inflation keeps it well within the Reserve Bank of India’s comfort zone of 4 per cent (with a 2 per cent margin on either side), bolstering prospects for monetary policy stability. Encouraged by the sustained decline in prices, the RBI has already cut the key policy rate by 50 basis points in two tranches, providing a further boost to growth.

Looking ahead, the RBI has projected CPI inflation for FY 2025-26 at a stable 4 per cent, with quarterly estimates ranging between 3.6 per cent and 4.4 per cent, suggesting a continued commitment to price stability while supporting economic recovery.