A 22-month high retail price inflation in gold ornaments pushed the rate of price rise in the personal care segment to nine per cent in April, from 8.25 per cent in March even as overall inflation eased to a 18-month low of 4.70 per cent in the first month of 2023-24.
This was despite the fact that the segment, called personal care and effects, had a high base effect in April last year. Inflation in the segment, which has a weight of 4.25 per cent in the consumer price index (CPI), stood at 8.62 per cent that month.
The CPI-based inflation rate in gold ornaments rose to 13.88 per cent in April, from 10.68 per cent in March.
Gold prices were high in April. According to a report by news agency PTI, gold prices hovered around Rs 60,000 per 10 grams around Akshay Tritya on April 22. Those have risen from around Rs 50,000 during Dhanteras on October 22 last year.
Gold is considered a safe haven asset and as such its prices have soared due to global economic uncertainty.
ICRA chief economist Aditi Nayar said the year-on-year (YoY) rise in gold prices contributed to the high inflation for personal care and effects. "This is one of the few commodity prices that transmits quickly to the CPI," she said.
Inflation in silver ornaments also rose in April. Silver ornaments witnessed deflation of 1.04 per cent in March but it gave way to inflation of 4.81 per cent in April.
Pearl and other ornaments saw inflation rising from 6.83 per cent in March to 7.58 per cent in April.
The personal care and effects segment has a diverse range of products. Besides ornaments, it includes items such as cream, lotion, perfume, shampoo, shaving set, umbrella, raincoat, lighter, toilet soap, toothpaste, toothbrush, comb, suitcase, trunk, box, clock, watch etc.
It also includes services such as those of barbers and beauticians.
Among these items, inflation in toilet soap, toothpaste, toothbrush, comb, cream, lotion, perfume, clock, watch, umbrella, raincoat, remained over six per cent in April.
Inflation in toilet soap was in double digits but it fell from 13.24 per cent in March to 11.93 per cent in April.
Surprisingly, inflation in clock and watch was also in double digits for five months since November 2022. However, it fell from 10.02 per cent in March to 9.31 per cent in April.
The rate of price rise in umbrella, raincoat rose from 8.05 per cent in March to 8.46 per cent in April due to untimely rains in certain parts of the country and ahead of the monsoon season.
Services of barbers and beauticians also had inflation of over six per cent in April. However, it came down from 7.11 per cent in March to 6.81 per cent in April.