India Inflation September 2018


India: Inflation accelerates modestly in September

October 15, 2018

In September, consumer prices fell 0.07% from the previous month, contrasting the 0.43% rise recorded in August. Lower prices were due to cheaper food and beverages. However, moderating the overall price decrease in September were higher prices for fuel and light; housing; clothing and footwear; and pan, tobacco and intoxicants.

Inflation appeared to shrug off the effects of a weakening rupee and higher oil prices in September, as the headline reading modestly rose to 3.8% from 3.7% in August, which was below market analysts’ expectations of 4.0%. This was because prices for food and beverages rose at a very slow pace, masking faster increases for fuel and light; housing; pan, tobacco and intoxicants; and clothing and footwear. Core inflation, which excludes food and energy products, moderated to 5.8% in September from 6.0% in August.

In September, the WPI rose 0.7% from the prior month, up from the revised 0.1% increase in August (previously reported: +0.3% month-on-month). Wholesale price inflation accelerated to 5.1% in September from 4.5% in August. Higher prices for fuel and light stoked inflation in September, coupled with more expensive manufactured products. Meanwhile, prices for primary articles increased at a modest pace. Annual average wholesale inflation accelerated to 4.1% in September from 3.9% in August.

India Inflation Forecast

FocusEconomics Consensus Forecast panelists expect consumer price inflation to average 4.7% in FY 2018, which is down 0.2 percentage points from last month’s forecast. In FY 2019, the panel expects consumer price inflation to average 4.7%. Meanwhile, our panel projects wholesale inflation of 4.2% for FY 2018, up 0.2 percentage points from last month’s report. In FY 2019, our panel foresees wholesale inflation averaging 4.1%.

Author:, Economist

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India Inflation Chart

India Inflation September 2018 1

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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