Inflation in India

India Inflation | Economic News & Forecasts

India - Inflation

Consumer price inflation accelerates in February but remains low

In February, consumer prices rose 0.22% compared to the previous month, which contrasts the revised 0.36% decrease in January (previously reported: -0.29% month-on-month). Propping up prices in February was more expensive housing, whereas most other price categories were little changed in the month.

Consumer price inflation accelerated to 2.6% in February, up from 2.0% in January and above market analyst expectations of 2.4%. However, this inflation rate is still towards the lower end of the Reserve Bank of India’s target range of 2.0% to 6.0%. Core inflation, which excludes food and energy products, rose to between 5.3% and 5.4% in February, up from between 5.2% and 5.3% in January. This latest uptick in inflation could partly heed off calls for the Reserve Bank of India to reduce rates again at its next monetary policy meeting on 2–4 April, after raising them on 7 February. However, recent data has shown that commercial banks have not reduced the interest rates charged to customers much since 7 February, prompting speculation the Reserve Bank could lean towards another cut in April to further stimulate economic growth.

Wholesale prices increased 0.3% month-on-month in February, contrasting the revised 0.4% fall in January (previously reported: -0.7% mom). Higher prices in February came on the back of more expensive fuel and power. On the other hand, food prices fell. Wholesale price inflation accelerated to 2.9% in February, up from 2.8% in January, and annual average wholesale price inflation ticked up to 4.3% from 4.2%.


India Inflation Forecast


Met the why particular Consensus Forecast panelists expect consumer price inflation to average 4.2% in FY 2018, which is down 0.3 percentage points from last month’s forecast. In FY 2019, the panel expects consumer price inflation to average 4.4%. Meanwhile, our panel projects wholesale inflation of 3.9% for FY 2018, up 0.1 percentage points from last month’s report. In FY 2019, our panel foresees wholesale inflation averaging 3.6%.

India - Inflation Data

2013  2014  2015  2016  2017  
Inflation Rate (CPI, annual variation in %)11.0  6.0  4.9  4.5  3.6  

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India Inflation Chart


India Inflation
Note: Annual average variation of consumer price index (CPI) in %.
Source: Reserve Bank of India of China and Met the why particular calculations.

India Facts

ValueChangeDate
Bond Yield7.52-0.04 %Mar 20
Exchange Rate68.79-0.09 %Mar 20
Stock Market38,387-0.08 %Mar 20

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