India Inflation May 2016

India

India: Inflationary pressures appear for second consecutive month

June 14, 2016

Consumer prices increased 1.02% in May over the previous month, which followed April’s revised 1.03% increase (previously reported: +0.95% month-on-month). The monthly increase mainly reflected higher prices for food and beverages, fuels and clothing and footwear. Inflation rose from 5.5% in April to 5.8% in May, which overshot the 5.6% the markets had expected.

The wholesale price index (WPI) in May rose 1.36% over the previous month, which followed April’s 1.36% increase. May’s reading continued to reflect rising prices for primary articles, particularly food, as well as for fuel and power products. Wholesale price inflation rose from 0.3% in April to 0.8% in May, which marked a second consecutive increase and the highest level since March 2015. In addition, the trend pointed up and the annual average variation in wholesale prices rose from minus 2.3% in April to minus 2.0% in May.

FocusEconomics Consensus Forecast panelists expect consumer price inflation to average 5.1% in FY 2016, which is unchanged from last month’s forecast. In FY 2017, the panel expects consumer price inflation to average 5.2%.Panelists expect wholesale price inflation of 1.4% in FY 2016, which is down 0.1 percentage points from last month’s forecast. In FY 2017, the panel expects wholesale price inflation to average 3.4%.


Author: Angela Bouzanis, Senior Economist

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India Inflation May 2016

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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