India: Inflation slows dramatically in November

In November, consumer prices rose 0.07% in November from the previous month, contrasting the revised 0.36% rise in October (previously reported: +0.29% month-on-month). Cheaper food and beverages weighed on the overall price increase in November, which was otherwise supported by higher energy prices.

Inflation slowed notably to 2.3% in November from a revised 3.4% in October (previously reported: 3.3%) and came in below market analysts’ expectations of 2.8%. This was primarily because prices for food and beverages declined. Core inflation, which excludes food and energy products, moderated to 5.8% in November from 6.3% in October.

In November, the WPI rose 0.1% from the prior month, down from the revised 0.7% increase in October (previously reported: +0.8% month-on-month). The weaker price rise in November was due to a decrease in fuel and power prices. Wholesale price inflation decelerated to 4.6% in November from 5.3% in October. Annual average wholesale inflation accelerated to 4.3% in November from 4.2% in October.

India Inflation Forecast

FocusEconomics Consensus Forecast panelists expect consumer price inflation to average 4.3% in FY 2018, which is down 0.4 percentage points from last month’s forecast. In FY 2019, the panel expects consumer price inflation to average 4.7%. Meanwhile, our panel projects wholesale inflation of 4.5% for FY 2018, up 0.2 percentage points from last month’s report. In FY 2019, our panel foresees wholesale inflation averaging 4.9%.