India: Inflation drops to lowest level in more than three years
May 14, 2013
In April, the wholesale price index (WPI) - India's preferred inflation measure - rose 0.53% over the previous month, which contrasts the 0.18% drop recorded in March. The monthly increase reflects an increase in prices for primary articles, particularly for food items, as well as for manufactured products.
Despite the monthly increase, annual headline inflation declined from 6.0% in March to 4.9% in April, which represents the lowest level since November 2009. In addition, the drop exceeded market expectations, which had WPI inflation falling to 5.4%. Annual average WPI inflation fell from 7.4% in March to 7.2% in April.
Meanwhile, also in April, the consumer price index rose 0.47% over the previous month, which is above the 0.32% recorded in the preceding month. Despite the monthly increase, annual inflation eased for the second consecutive month, dropping from 10.4% in March to 9.4% in April.
FocusEconomics Consensus Forecast panellists anticipate wholesale price inflation to average 6.5% in fiscal year 2013/14, which is down 0.1 percentage points from last month's forecast. In the fiscal 2014/15, the panel anticipates wholesale price inflation to average 6.2%.
Author: Ricardo Aceves, Senior Economist