India’s headline retail inflation climbs to 7.8% y/y, an eight-year high, in April 2022
Headline retail inflation stood at 7.8% in April 2022, as compared to 7.0% in March. Core inflation spiked up for a fourth consecutive month in April, to 7.0%. This marks the highest recorded inflation for both headline and core, since April 2014, at 8.5% and 8.4%, respectively. The increase in the consumer price index (CPI) has continued on the back of a prolonged war between Russia and Ukraine that has added to global supply disruptions. The consumer price index for food and beverages, which form the largest share of the total inflation basket, grew by 8.1% y/y in April, accelerating from 7.5% y/y in March. The CPI for miscellaneous items, which forms the second largest category following food and beverages, underwent a sharp increase to 8.0% y/y, the highest since September 2012. The third-largest component, CPI for housing, grew by 3.5% y/y in April, accelerating from 3.4% y/y in the previous month. Clothing and footwear prices also continued to climb upwards as the corresponding CPI stood at 9.9% y/y in April, from 9.4% y/y in March, the highest since June 2013. The CPI for fuel and light grew by 10.8% y/y in April, spiking up sharply from 7.5% y/y in March, after five months of continued deceleration, as the elevated crude oil prices got absorbed at the retail level.
In terms of components of the food basket, all the major items sustained the increase that was seen in the previous month. The CPI for cereals and products increased by 6.0% y/y, recording a 1pp acceleration over the previous month. The prices of milk and milk products also spiked up as the CPI recorded a growth of 5.5% y/y. The CPI for vegetables grew by 15.4% y/y, recording an increase of 3.8pp over the previous month, making it the largest acceleration among others. This was followed by the increase in the CPI for fruits, which grew by 2.5pp to 5.0% y/y in April. Prepared meals, snacks, sweets, etc., increased by 7.1% y/y in April, by 0.5pp. On the other hand, meat and fish, as well as oils and fats, saw some respite in the form of deceleration in the CPI growth values.
Rural and urban inflation, both climbed upwards in April, to 8.4% and 7.1%, respectively. Much like the headline figure, the CPI for rural is at its highest since 2013. The urban inflation, however, climbed to its highest in October 2020, to 7.3% y/y. In terms of states, especially the major ones, West Bengal and Madhya Pradesh saw the largest increase in CPI, at 9.1% y/y, followed by Telangana at 9% y/y. On the other side, Kerala, Tamil Nadu, and Karnataka recorded the lowest inflation, at 5.1% y/y, 5.4% y/y, and 6.4% y/y, respectively. The north-eastern states continue to have lower-than-average inflation, with the exception of Arunachal Pradesh, which saw the highest inflation in April amongst all states, at 9.2% y/y, and Assam, where inflation was at 8.5%.
Further data and analysis on India’s economy are available on the CEIC India Economy in a Snapshot – Q2 2022 report.