India Inflation February 2017

India

India: Price pressures rise in February

March 14, 2017

In February, consumer prices in India rose 0.23% from the previous month, which contrasted January’s 0.08% decrease. The rise came on the back of higher prices for tobacco and intoxicants, housing, and fuel and light. Inflation rose in February, jumping from 3.2% to 3.7%. January’s reading had marked a multi-year low. Inflation is below the Central Bank’s target of 5.0% for Q4 FY 2016 and lies below the center of its medium term target of 4.0% plus/minus 2.0 percentage points.

The wholesale price index (WPI) in February rose 0.49% from the previous month, which was below January’s 0.71% increase. Prices for fuel and power products continue to increase on the back of higher commodities prices, while prices for manufactured goods were flat over the previous month. Wholesale price inflation rose to 6.6% in February from 5.3% in January, the highest rate since May 2013. As a result, the trend pointed upward and annual average wholesale inflation rose to 3.1% in February from 2.5% in January.

FocusEconomics Consensus Forecast panelists expect consumer price inflation to average 4.9% in FY 2016, which is unchanged from last month’s forecast. In FY 2017, the panel expects consumer price inflation to average 4.9%, which is also unchanged from last month’s forecast. Panelists expect wholesale price inflation of 3.0% in FY 2016, which is unchanged from last month’s forecast. In FY 2017, the panel expects wholesale price inflation to average 4.0%, which is also unchanged from last month’s projection.


Author: Angela Bouzanis, Senior Economist

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India Inflation Chart


India Inflation February 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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