India Inflation August 2016

India

India: Price pressures moderate in August

In August, consumer prices were flat over the previous month, which contrasted July’s 0.77% rise. The monthly result mainly reflected that a mild rise in prices for pan, tobacco and intoxicants were balanced by lower prices for food and beverages as well as for fuel and light. Inflation fell from July’s nearly two-year high of 6.1% to 5.0% in August. As a result, inflation is at the upper limit of the Central Bank’s target of 4.0% plus or minus 2.0 percentage points.

The wholesale price index (WPI) in August fell 0.44% over the previous month, which contrasted July’s 0.55% increase and marked a six-month low. August’s reading reflected falling prices for primary articles as well as for fuel and power products. Wholesale price inflation was broadly stable, inching up from 3.6% in July to 3.7% in August. The trend pointed up and the annual average variation in wholesale prices rose from minus 1.0% in July to minus 0.2% in August.

FocusEconomics Consensus Forecast panelists expect consumer price inflation to average 5.2% in FY 2016, which is down 0.1 percentage points from last month’s forecast. In FY 2017, the panel also expects consumer price inflation to average 5.2%.Panelists expect wholesale price inflation of 2.6% in FY 2016, which is up 0.2 percentage points from last month’s forecast. In FY 2017, the panel expects wholesale price inflation to average 3.4%.


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India Inflation August 2016

Note: Annual and monthly variation of wholesale price index (WPI) and annual variation of consumer price index (CPI) in %.
Source: Ministry of Commerce and Industry and FocusEconomics calculations.


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