India: Inflation falls to 40-month low
April 15, 2013
In March, the wholesale price index (WPI) - India's preferred inflation measure - rose 0.24% over the previous month, which was below the 0.59% increase observed in February. The reading reflects higher prices for primary articles as well as for fuel and energy.
Despite the monthly rise, annual headline inflation fell from 6.8% in February to 6.0% in March, which represents the lowest level since November 2009. In addition, the reading undershot market expectations, which had WPI inflation falling only to 6.3%. As a result, average WPI inflation slowed to 7.3% in the fiscal year 2012/13, down from the 8.9% registered in the FY 2011/12.
Meanwhile, also in March, the consumer price index rose 0.32% over the previous month, below the 0.63% increase observed in February. As a result of the softer increase, inflation slowed for the first time in six months, easing from 10.9% in February to 10.4%.
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