India Inflation

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India: Inflation rises in December

January 14, 2015

Consumer prices in December fell 0.41% over the previous month, which marked the steepest monthly drop in 11 months. The reading contrasted the 0.21% increase observed in November and the 1.0% drop registered in December 2013. The monthly fall mainly reflected lower prices for food, beverages and tobacco. Annual inflation rose from 4.4% in November to 5.0% in December, which, nonetheless, fell short of the 5.4% the markets had expected.

The wholesale price index (WPI) in December decreased 0.94% over the previous month, which followed the revised 1.20% fall observed in November (previously reported: -1.31% month-on-month). December’s fall stemmed from lower food prices as well as for fuel. The decrease in fuel prices was the result of the recent sharp fall in global oil prices.

Wholesale prices in December rose 0.1% over the same month of the previous year, which inched up from the flat reading observed in November. December’s annual print undershot the 0.4% rise the markets had expected. As a result of the subdued reading, annual average WPI inflation fell from 4.4% in November to 3.9% in December.

FocusEconomics Consensus Forecast panelists expect consumer price inflation to average 7.0% in FY 2014/2015, which is down 0.1 percentage points from last month’s forecast. In FY 2015/2016, the panel expects consumer price inflation to average 6.3%. Panelists expect wholesale price inflation to average 4.6% in FY 2014/2015, which is unchanged from last month’s forecast. In FY 2015/2016, the panel expects wholesale price inflation to average 4.2%.


Author:, Senior Economist

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India Inflation Chart


India Inflation December 2014 0

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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