India Inflation December 2020


India: Inflation falls to over one-year low in December

January 12, 2021

Consumer prices dropped 1.01% over the previous month in December, contrasting November's 0.32% rise. December's result marked the sharpest fall in prices since December 2013. Looking at the details of the release, prices for food and beverages plunged in December. However, prices for fuel and light increased. Meanwhile, clothing and footwear prices grew at a softer pace.

Inflation came in at 4.6% in December, down from November’s 6.9%. December's result marked the weakest inflation rate since September 2019. Accordingly, the trend pointed down, with annual average inflation coming in at 6.6% in December (November: 6.9%).

FocusEconomics Consensus Forecast panelists project consumer price inflation to average 6.2% in FY 2020, which ends in March 2021. The estimate is up 0.6 percentage points from last month’s forecast. In FY 2021, the panel projects consumer price inflation to average 4.5%. Meanwhile, our panel sees wholesale inflation averaging -0.9% in FY 2020, which is down 1.1 percentage points from last month’s report, and 3.8% in FY 2021.


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