Retail inflation surged to 7.79% in April, the highest since September 2014

Retail inflation surged to 7.79% in April, the highest since September 2014

India’s retail inflation surged to 7.79% in April. This was primarily due to rising fuel and food prices, government data showed Thursday. Inflation on a consumer price basis has been well above the Reserve Bank of India’s (RBI) tolerance for the fourth straight month. The RBI is mandated by the center to maintain retail inflation from 2% to 6%.

April CPI inflation expanded at the fastest pace since September 2014. CPI inflation in March was 6.95%.

Inflation in food baskets rose from 7.68% last month to 8.38% in April.

Food inflation, which accounts for nearly half of the consumer price index (CPI) basket, reached its highest level in months in April and could continue to rise due to rising global vegetable and cooking oil prices. The RBI primarily considers retail inflation figures when reaching bimonthly policy decisions.

With rising price outlooks, RBI raised its repo rate for the first time in four years, raising it by 40 basis points (bps) to 4.40% at an off-cycle meeting earlier this month. Repo rate is the rate at which RBI lends funds to a commercial bank.