India consumer price inflation hits eight-year high on food, energy costs

div classBodysc17zpet90 cdBBJodivpBy Manoj Kumar and Aftab Ahmedp

pNEW DELHI Reuters Rising food and energy prices pushed India‘s annual retail inflation up towards an eightyear high in April, strengthening economists’ view that the central bank would have to raise interest rates more aggressively to curb prices. pdivdivdiv classBodysc17zpet90 cdBBJodiv

pConsumer prices have increased around the world as Russias invasion of Ukraine pushed up crude oil and food grain price rises to record highs, prompting many central banks to raise interest rates.p

pConsumer price indexbased inflation rose more than expected to 7.79 in April yearonyear, remaining above the Reserve Bank of Indias RBI tolerance band of 6 for a fourth month in a row, data released by National Statistics Office showed on Thursday.p

pAprils print was higher than 6.95 in the previous month and 4.23 a year ago. Analysts had forecast retail inflation at 7.5, according to a Reuters poll. p

pThe RBIs monetary policy committee MPC, which raised the key repo rate by 40 basis points to 4.40 at an unscheduled meeting earlier this month, will consider more interest rate hikes at its June meeting, a source familiar with the matter told reporters on Wednesday. p

pThe next meeting of RBIs MPC is scheduled for June 68.p

pSakshi Gupta, principal economist at HDFC bank, said inflation was likely to remain above 7 over the next six or seven months. p

p“The RBI is likely to respond with a rate hike at the June meeting by 2535 basis points bps and follow it up with further rate hikes taking the repo rate to prepandemic levels of 5.15,” she said. p

pTOUGH TIMES FOR CONSUMERS p

pRising food prices have emerged as an overriding worry for consumers – already hit hard during two years of the pandemic – as prices of edible oil and vegetables have surged amid fears of a fall in wheat output this year.p

pIndias annual retail headline inflation was at 8.33 in May 2014 when Prime Minister Narendra Modi took charge and promised to bring down prices.p

pThe rise in cost of living in India has forced millions of parents to move children from private https:www.reuters.comworldindiaindiasprivateschoolaspirationincreasinglyoutreachinflationbites20220503 to state run schools, or from elite schools to cheaper ones. p

pPrices of food items, which make up nearly half of the consumer price index CPI, rose 8.38 yearonyear in April, compared with 7.68 a month earlier, pushed by rise in edible oil and vegetable prices.p

pA near 4 rupee depreciation against dollar this year has also made imported items costlier. p

pIndias rupee touched a fresh record low of 77.63 against the dollar before paring some losses to end at 77.42 after central bank intervened. p

pBoth the NSE Nifty 50 index and S&P BSE Sensex closed more than 2 lower as inflation fears and further interest rate tightening roiled markets.p

pRetail prices of petrol, diesel and cooking gas have gone up by 10 since midMarch, while many companies passed on hike in input costs like transport, imported raw material to consumers. p

pCore CPI inflation, excluding volatile food and energy prices, was estimated between 6.8 and 7.1 in April, by three economists, compared with 6.30 to 6.32 in the previous month. p

p“With rises in prices of food items and fuel, it is becoming increasing difficult to meet household expenses,” said Nadeem Khan, a vendor with fooddelivery firm Swiggy. p

p Reporting by Manoj Kumar and Aftab Ahmed Additional reporting by Nallur Sethuraman in Bengaluru Editing by Raissa Kasolowsky, Bernadette Baum and Hugh Lawsonp

divdivdiv classBodysc17zpet90 cdBBJodivdivdiv