Informist Poll
April CPI inflation seen near-six-year low of 3.2%
This story was originally published at 14:12 IST on 8 May 2025
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NEW DELHI - India's headline retail inflation rate is expected to fall for the sixth month in a row in April, with an Informist poll of 10 economists suggesting consumer prices would have risen 3.2% last month. At 3.2%, the projected CPI inflation rate for April is the lowest since July 2019, or almost six years, when it came in at 3.15%.
Estimates for April CPI inflation were in the range of 2.8-3.31%. The statistics ministry will release CPI data for April at 1600 IST, Tuesday. CPI inflation in March was at a 67-month low of 3.34%.
Inflation likely fell in April due to a continued decline in food prices, particularly those of vegetables, with data from the Department of Consumer Affairs showing onions were 14% cheaper in April compared to March. Potato prices also fell 1.6% on month, although those of tomato were up a marginal 0.9% in April.
"The fall in food prices, especially vegetable prices that is a normal feature during winter months, started in the month of November and is continuing the trend even in the month of April as against the norm of till February/March," economists at Union Bank of India, Kanika Pasricha and Nidhi Arora, said in a note Tuesday. "It is interesting to note that the trough for vegetables CPI index is yet to be hit as prices have continued to cool in the first week of May as well."
In March, the vegetable index of the CPI fell 5.7% on month, dragging down the retail food inflation to a 40-month low of 2.69%. April also saw weaker price momentum for some other food items such as cereals, with rice and wheat 0.4-2.9% cheaper compared to March and prices of pulses down 0.4-3.7%. However, edible oils were slightly more expensive last month.
As per Crisil's monthly Roti Rice Rate report, the cost of home-cooked vegetarian as well as non-vegetarian 'thalis' was down 4% on year and 1-2% on month, respectively, in April. Union Bank of India expects 'food and beverage' inflation to fall to 1.90% in April from 2.88% in March.
Meanwhile, the price hike of INR 50 for liquefied petroleum gas cylinders announced on Apr. 7 is seen being countered by lower kerosene prices, according to Dipanwita Mazumdar, an economist at Bank of Baroda. Core inflation, or inflation excluding food and fuel items, is seen remaining largely stable around 4.1%, same as March, and could even inch lower than this.
Should CPI inflation come in at 3.2% in April, it will be lower than the Reserve Bank of India's medium-term target of 4.00% for the third month in a row and give further confidence to the Monetary Policy Committee to lower interest rates at its next meeting in June. The committee, which has cut the repo rate by 50 basis points to 6.00% so far in 2025, is widely expected to reduce the policy rate by another half a percentage point in the next few months to support growth amid subdued price pressures.
"The expectation of above normal monsoon, downside risks to commodity price cycle amidst anticipation of muted global growth and slackening demand conditions, as highlighted in transcripts of major FMCG (fast-moving consumer goods) companies, hint that CPI might undershoot RBI's target in Q1FY26 (Apr-Jun) as well," Bank of Baroda's Mazumdar said.
The RBI expects CPI inflation to average around 3.6% in Apr-Jun and 4.0% in 2025-26 (Apr-Mar). Economists, though, see full-year inflation well below the RBI's forecast, with Teresa John of Nirmal Bang Institutional Equities expecting it to average 3.5% this year given the benign inflation outlook for the foreseeable future on the back of cooling global commodity prices, a "decent" rabi crop, and expectations of a normal monsoon. "This implies that rate cut cycle may be deeper than our base case of 100 bps, particularly if growth remains sluggish," John added.
The following is a summary of the poll on CPI inflation in April:
| ORGANISATION | CPI INFLATION ESTIMATE |
| CareEdge | 2.8% |
| Union Bank of India | 2.96% |
| Bank of Baroda | 3% |
| Nirmal Bang Institutional Equities | 3.18% |
| STCI Primary Dealer | 3.2% |
| ICICI Bank | 3.27% |
| Sunidhi Securities | 3.28% |
| ANZ | 3.3% |
| ICRA | 3.3% |
| YES Bank | 3.31% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Siddharth Upasani
Edited by Tanima Banerjee
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