India Inflation

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India: Inflation falls further in October and wholesale price inflation drops to five-year low due to lower food and energy prices

November 14, 2014

In October, consumer prices added 0.14% over the previous month, which came in above the flat reading observed in September. Annual inflation fell from 6.5% in September to 5.5% in October, which marked the lowest level since records began in January 2012. In addition, the reading undershot the 5.7% rate the market had expected.

The wholesale price index (WPI) fell 0.59% in October over the previous month. The reading followed a 0.38% drop in September and represented the sharpest monthly decrease in ten months. October’s drop was mainly affected by lower prices for fresh food, particularly for onions, which is an essential part of the Indian diet. In addition, lower fuel prices dragged down the wholesale price index over the previous month, reflecting the recent sharp fall in global oil prices.

Wholesale prices rose 1.8% in October over the same month last year, which came in below both the 2.4% year-on-year increase registered in September and the 2.1% rise the market had expected. The reading marked the slowest annual increase in five years. As a result, annual average WPI inflation fell from 5.5% in September to 5.0% in October.

FocusEconomics Consensus Forecast panelists expect wholesale price inflation to average 5.4% in FY 2014/2015, which is unchanged from last month’s forecast. In FY 2015/2016, the panel expects wholesale price inflation to average 6.0%.


Author:, Senior Economist

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India Inflation Chart


India Inflation October 2014

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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