Retail inflation at 8-year high of 7.8% on food and fuel costs


NEW DELHI: Retail inflation in India hit a nearly eight-year high in April due to escalating food and fuel prices and the impact of disrupted supply chains global markets due to the war in Ukraine, which has increased pressure on the authorities struggling to revive growth and triggering the need for steeper interest rate hikes to rein in inflationary pressures.
Data released by the Office for National Statistics on Thursday showed inflation, as measured by the consumer price index, galloped to 7.8% in April – the highest since 8.3% in May 2014 – compared to nearly 7% in March. At 8.4%, rural inflation exceeded urban inflation (7.1%). The food price index jumped to 8.4% in April, higher than 7.7% in March, which experts said was largely due to higher wheat prices due to the diversion of the commodity for export.

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Inflation prompted RBI to raise rates by 40 basis points in a surprising move this month. Experts expect the central bank to raise rates aggressively again in the coming months, starting in June, to rein in inflation and protect the ongoing economic recovery.

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