Inflation eases to 4.89% in April; lowest since Nov 2009

This is the lowest level of inflation since November, 2009 when it was 4.78 percent.

Last Updated: May 15, 2013, 08:50 AM IST

New Delhi: Declining price of food items, including fruits and vegetables, pulled down inflation to nearly a three-and-a-half-year low of 4.89 percent in April, which may present a case for further monetary policy easing.

Inflation based on the Wholesale Price Index (WPI) stood at 5.96 percent in March. In April, 2012, it was 7.50 percent.

This is the lowest level of inflation since November, 2009 when it was 4.78 percent.

As per official data released today, WPI inflation in the manufactured items category declined to 3.41 percent in April from 4.07 percent in March.

Also, inflation in food articles category, which has a 14.34 percent share in the WPI basket, came down to 6.08 percent. Inflation in this category was at 8.73 percent in March.

The easing in food inflation was helped by a sharp drop in prices of vegetables. Inflation in vegetables stood at (-)9.05 per cent in April, against (-)0.95 percent in the previous month.

The inflation in fruits declined to 0.71 percent during the month as compared to 4.71 percent in March.

However, the rate of price rise in onion was high at 91.69 percent for the month of April, as against inflation rate of 94.85 percent in the previous month.

Inflation for February was revised upwards to 7.28 percent from 6.84 percent as per provisional estimates.

The retail inflation, as measured by consumer price index, came down to single digit at 9.39 per cent in April after many months, indicating that inflationary expectation is on declining trend.

The RBI will take into account the declining inflationary trend while unveiling its mid-quarter policy review on June 17.

Commenting on inflation figures, Department of Economic Affairs Secretary Arvind Mayaram said: "We are happy that inflation figure has come down".

Inflation in wheat eased to 13.89 percent in April, as against 19.87 percent in the previous month. Potatoes too saw decline to (-)2.42 percent, from 20.06 per cent in March.

Inflation rate in rice and cereals eased to 17.09 percent and 15.63 percent, respectively, in April.

Pulses prices declined marginally to 10.28 percent during the month.

While the inflation rate in egg, meat and fish category stood at 10.44 percent, for milk it was 4.04 percent.

For the fuel and power category, it was lower at 8.84 percent in April as compared to 10.18 percent in March, 2013.

In order to accelerate economic growth, the Reserve Bank of India (RBI) earlier this month cut key interest rates by 0.25 percent.

"Although headline WPI inflation has eased by March, 2013 to come close to the Reserve Bank's tolerance threshold, it is important to note that food price pressures persist and supply constraints are endemic, which could lead to a generalisation of inflation...," the RBI had said.