Inflation eases in India, wholesale price inflation spikesStaff Writer | February 16, 2017
In January, consumer prices in India fell 0.08% from the previous month, which was a smaller drop than December’s 0.61% decrease.
Economy in India Consumer prices fell 0.08%
Inflation continued to fall in January, declining from December’s 3.4% to a multi-year low of 3.2%.
As a result, inflation is below the Central Bank’s target of 5.0% for Q4 FY 2016 and lies below the center of its medium term target of 4.0% plus/minus 2.0 percentage points.
The wholesale price index (WPI) in January rose 0.98% from the previous month, contrasting December’s 0.38% fall. The rise in the index was driven by a jump in prices for fuel and power.
In addition, prices for manufactured products rose mildly. Wholesale price inflation rose to 5.3% in January from 3.4% in December, the highest rate since August 2014.
Higher commodity prices have accelerated wholesale price pressures in recent months.
As a result, the trend pointed upward and annual average wholesale inflation rose to 2.5% in January from 2.0% in December.
FocusEconomics Consensus Forecast panelists expect consumer price inflation to average 4.9% in FY 2016, which is unchanged from last month’s forecast.
In FY 2017, the panel expects consumer price inflation to average 5.0%, which is also unchanged from the previous month’s forecast.
Panelists expect wholesale price inflation of 2.4% in FY 2016, which is down 0.5 percentage points from last month’s forecast.
In FY 2017, the panel expects wholesale price inflation to average 3.9%, which is unchanged from the previous month’s projection. ■