Headline Inflation down to 4.89% in April as compared to 5.96% in previous month

Hitting a 41 month low the Inflation based on Wholesale Price Index (WPI) is down to 4.89% in April, according to the official data. The headline inflation had slowed for a third straight month, a level seen comfortable for the RBI to persist with monetary easing to revive a flagging economy.

After November, 2009 inflation of 4.78 per cent this is the lowest level. The Inflation based on the Wholesale Price Index (WPI) stood at 5.96 per cent in March. In April, 2012, it was 7.50 per cent.

The inflation come down to a three-and-a-half year low of 4.89 percent is caused by the declining price of food items, including fruits and vegetables. This decline may present a case for further monetary policy easing. 

Here are some highlights:

• The WPI inflation in the manufactured items category declined to 3.41 per cent in April from 4.07 per cent in March. 

• In food articles category, which has a 14.34 per cent share in the WPI basket, Inflation came down to 6.08 per cent. Were it was at 8.73 per cent in March. 

• The prices of vegetables dropped sharply as the food inflation is eased. Inflation in vegetables stood at (—) 9.05 per cent in April, against (—) 0.95 per cent in the previous month.

• The inflation in fruits declined to 0.71 per cent during the month as compared to 4.71 per cent in March.

• The rate of price rise in onion was high at 91.69 per cent for the month of April, as against inflation rate of 94.85 per cent in the previous month.

The Retail inflation, as measured by consumer price index (CPI), came down to single digit at 9.39 per cent in April, suggesting the declining trend of Inflation. 

As RBI is closely watching the inflation figures it will take into account the declining inflationary trend while unveiling its mid-quarter policy review on June 17 and may cut the rates to boost the growth of the economy.