The inflation number gauged by Consumer Price Index (CPI) in April stood at 5.8 percent compared to 6.57 percent last month. This, analysts said, is the second month straight that saw the number hitting another low of the rebased CPI index. This is the lowest reported reading, including the old base, since March 2004. Inflation stood at 1.1 percent as against 0.4 percent in March on a month-on-month (MoM) basis and at 7.8 percent in the first ten months of financial year 2013 (10MFY13) versus 10.80 percent in the same period last year. Compared to last month non-perishable food items- 30 percent weightage- witnessed a decline of 0.3 percent but a one percent increase in HRI index resulted in a higher number. Other heads, which witnessed a substantial increase, were perishable food items, up by 13 percent MoM, and education, up 2.5 percent MoM, said analysts from Topline. “On a yearly basis, reduced gas prices and no increase in electricity tariff has continued to keep the base low,” viewed Nauman Khan of Topline Research. The core inflation, that consists of non-food and non energy items, stood at 8.7 percent in April as against 9.0 percent last month while trimmed core inflation came down to 7.6 percent as against 8.4 percent last month. With another soft inflation reading in April, analysts estimate FY13 average inflation is likely to stand below 8 percent which is significantly lower than the government target of 9.5 percent. “We foresee lower inflation reading which can possibly delay the reversal rate eyed by market participants towards 2013 end,” said the analyst.
