By Shivangi Acharya and Sarita Chaganti Singh<\/p>\n
NEW DELHI, May 12 (Reuters) – India’s retail inflation rose marginally to 3.48% in April, driven by dearer food prices, government data showed on Tuesday, but the outlook \u200cremains clouded by risks from rising energy costs tied to the Middle East conflict.<\/p>\n
April’s reading came in \u200cbelow a Reuters’ projection of 3.8% and close to March’s 3.4%. The April data is the highest in the new series launched in January \u200bthis year with a revised basket of goods and a new base.<\/p>\n
Annual inflation remains below the central bank’s 4% target, but is expected to rise in the coming months as higher global oil prices increasingly feed into domestic costs.<\/p>\n
The rising energy bills risk widening the current account deficit, weakening the rupee and adding to price pressures for the world’s third-largest oil \u200cimporter. This year’s monsoon season, expected to \u2060be deficient, is also likely to push up food prices in the months ahead.<\/p>\n
Food inflation was at 4.2% in April, compared with March’s 3.87%.<\/p>\n
India is yet to raise retail fuel prices \u2060following the surge in global crude costs, allowing oil retailers to bear losses instead. India will need to assess how long prices can remain low, the country’s federal oil minister said on Tuesday.<\/p>\n
A hike in petrol and diesel prices will lead to \u200ba \u200breset in prices across segments, including transportation, and push up the \u200bheadline inflation rate.<\/p>\n
“The risks to inflation remain skewed \u200ctowards the upside (due to) higher energy prices, rupee weakness as well as any disruptions due to El Nino during the monsoon season,” Sakshi Gupta, economist at HDFC Bank, said.<\/p>\n
With the surge in energy prices also pressuring the rupee and external balances, Prime Minister Narendra Modi has urged a series of austerity measures to conserve fuel and foreign exchange.<\/p>\n
The Indian rupee sank to a record low of 95.7375 on Tuesday, taking losses since the Iran war broke out to \u200cnearly 5%. A weaker rupee pushes up prices of imported goods \u200band adds to inflation.<\/p>\n
“WAIT AND WATCH”<\/p>\n
The Reserve Bank of India has kept \u200binterest rates steady as headline inflation remains modest, \u200bbut economists say a sustained rise in fuel and food costs could narrow room for \u200cfuture policy easing and tilt the scales towards rate \u200bhikes later in the year.<\/p>\n
“We \u200bexpect RBI to remain on a wait-and-watch mode for now to assess the pass-through of the risks. However, the risks for early rate hikes (probably from October onwards) are building up,” said Upasna Bhardwaj, chief economist at \u200bKotak Mahindra Bank in Mumbai.<\/p>\n","protected":false},"excerpt":{"rendered":"By Shivangi Acharya and Sarita Chaganti Singh NEW DELHI, May 12 (Reuters) – India’s retail inflation rose marginally…\n","protected":false},"author":2,"featured_media":481110,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[79,179,18,1259,10454,42824,19,17],"class_list":{"0":"post-481109","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-eire","11":"tag-energy-prices","12":"tag-food-prices","13":"tag-headline-inflation","14":"tag-ie","15":"tag-ireland"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116562525349517940","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/481109","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=481109"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/481109\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/481110"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=481109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=481109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=481109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}