India Inflation


India: Inflation falls for first time following six months of increase

January 15, 2014

The wholesale price index (WPI) - India's preferred inflation measure - decreased 1.27% over the previous month in December, which marked the sharpest fall since December 2008. The reading contrasted the 0.44% increase registered in November and primarily resulted from a significant decline in prices for food, particularly for fresh food.

Wholesale prices increased 6.2% over the same month of the previous year, which came in below the 7.5% rise observed in November, marking the first decline in inflation after six consecutives months of increase. The annual reading undershot the 6.9% increase the market had expected. As a result of the fall in the annual figure, annual average WPI inflation inched down from November's 6.4% to 6.3% in December.

In addition, the consumer price index decreased 1.00% over the previous month in December (November: +1.31% month-on-month), which is the fastest decrease that has been recorded since records began in January 2011. Annual inflation plunged from 11.2% in November to 9.9% in December.

FocusEconomics Consensus Forecast panelists expect wholesale price inflation to average 6.0% in fiscal year 2013/2014, which is unchanged from last month's forecast. In fiscal year 2014/2015, the panel expects wholesale price inflation to average 5.8%.

Author:, Senior Economist

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India Inflation Chart

India Inflation December 2013

Note: Monthly and annual variation of wholesale price index in %.
Source: Reserve Bank of India (RBI) and FocusEconomics calculations.

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