CPI inflation reaches 7.8% in a broad-based surge

Inflation based on the Consumer Price Index (CPI), also known as retail inflation, rose for the seventh consecutive month, reaching 7.8% in April 2022, the highest since May 2014. Most major goods and services saw prices jump, with food and fuel recording relatively higher inflation. Worryingly, core¹ inflation too rose to its 8-year high, reflecting the broad-basing of inflationary pressures in the economy.

Inflationary pressures are getting generalised, with food, fuel and core, all recording a sharp rise. This trend expected to continue this fiscal, as a wide-ranging rise in commodity prices and supply disruptions push producers to pass on cost pressures to consumers. We expect CPI inflation to average 6.3% in fiscal 2023 compared with 5.5% in the previous year, with risks tilted to the upside.

Inflation trends in April: Highlights

• CPI inflation rose to 7.8% in April compared with 7% previous month and 4.2% in April 2021
• Food inflation jumped to 8.4% from 7.7% previous month and 2% a year ago
• Fuel² inflation rose to 10.8% from 7.5% previous month and 8% a year ago
• Core CPI inflation rose to 7.1% from 6.4% previous month and 5.3% a year ago
• Within core, both goods and services saw rising trend. Core goods inflation (excluding petrol and diesel) rose to 7.7% in April from 7.4% previous month, while services inflation rose to 5.4% from 5.2%
• Rural CPI inflation was higher at 8.4% in April versus 7.1% in urban areas
• The poorest 20% of income segments faced maximum inflation burden in both rural and urban areas

¹ CPI excluding food and beverages and fuel and light
² Refers to CPI fuel and light