India Inflation April 2017

India

India: Price pressures ease in April

May 16, 2017

In April, consumer prices rose 0.15% from the previous month, which followed March’s 0.23% rise. Prices rose moderately for food and beverages, as well as for fuel and light. Inflation eased in April, falling from March’s 5-month high of 3.9% to 3.0%. Inflation lies below the Central Bank’s medium-term target of 4.0% plus/minus 2.0 percentage points.

Meanwhile, the government updated its wholesale price index methodology, changing the base year as well as the basket and weighting. Recalibrated data showed that the wholesale price index (WPI) declined 0.18% from the previous month in April, which contrasted March’s 0.35% rise. The fall was driven by declining prices for fuel and power. Wholesale price inflation fell from 5.3% in March to 3.9% in April. Moreover, the new data methodology show much lower price pressures in the economy than with the previous figures. Although the trend pointed upward and annual average wholesale inflation rose to 2.2% from 1.8% in March, this was much lower than the 3.7% figure for March previously reported under the old methodology.

FocusEconomics Consensus Forecast panelists expect consumer price inflation to average 4.9% in FY 2017, which is unchanged from last month’s forecast. In FY 2017, the panel expects consumer price inflation to average 5.0%.


Author: Angela Bouzanis, Senior Economist

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India Inflation April 2017

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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