Apr-23 CPI inflation at 4.70%YoY was in large part driven by a favourable base

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May 12, 2023

QuantEco Research || Apr-23 CPI Inflation - A year on...Peak to trough

Apr-23 CPI inflation at 4.70%YoY was close to our expectation of 4.76%. With the Apr-23 print, CPI inflation remained within RBI’s target range for the second consecutive month. While food price pressures remained somewhat broad-based, the material let-up in some of the key categories such as Wheat and Oilseeds continued to offer comfort. In addition to non-core, Apr-23 CPI fine-print confirms nascent signs of moderation in core price pressures. From a policy perspective, movement in headline towards the 4% target and a drop in core inflation to under 6% (after a gap of 10-months) would be comforting. If oil prices stay at current levels and El Nino impact remains mild, some downward bias to our FY24 CPI inflation estimate of 5.3% could emerge.