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India: Inflation falls sharply and wholesale prices record largest decline on record in July

August 14, 2015

Consumer prices in July increased 0.57% over the previous month, which was below June’s 1.15% rise. The monthly result partly reflected moderate increases in the prices of food and beverages as well as fuel and light. Inflation fell sharply in July, slowing from June’s 5.4% to 3.8%. July’s result marked the lowest inflation rate in eight-months. In addition, the result undershot market analysts’ expectations of 4.4% inflation.

The wholesale price index (WPI) in July fell 0.62% over the previous month, which contrasted June’s 0.34% increase. July’s result came on the back of declines in all major groups of the index. On an annual basis, wholesale prices fell 4.1% in July, which was a steeper decline than June’s 2.4% decrease and marked the largest decline on record. As a result, annual average WPI inflation fell from zero growth in June to minus 0.8% in July.

FocusEconomics Consensus Forecast panelists expect consumer price inflation to average 5.4% in FY 2015/2016, which is unchanged from last month’s forecast. In FY 2016/2017, the panel expects consumer price inflation to average 5.5%. Panelists expect wholesale price inflation to average 0.3% in FY 2015/2016, which is down 0.2 percentage points from last month’s forecast. In FY 2016/2017, the panel expects wholesale price inflation to average 4.5%.


Author: Angela Bouzanis, Senior Economist

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India Inflation Chart


India Inflation July 2015

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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