Inflation in India
India witnessed moderately high inflation from 2013 to 2022, generally oscillating between 4% and 6%. The country's inflation dynamics were influenced by various factors, including domestic economic activities, monsoon patterns affecting agricultural output, and policy decisions. India's central bank, the Reserve Bank of India, implemented several measures to control inflation, including monetary policy adjustments.
Over the past decade until 2022, consumer price inflation in India averaged 5.5%, which was above the Asia-Pacific's regional average of 2.1%. The 2022 average figure was 6.7%. For more inflation information, visit our dedicated page.
India Inflation Chart
Note: This chart displays Inflation Rate (CPI, annual variation in %) for India from 2013 to 2022.
Source: MOSPI India.
India Inflation Data
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Inflation (CPI, ann. var. %, aop) | 3.4 | 4.8 | 6.2 | 5.5 | 6.7 |
| Inflation (CPI, ann. var. %, eop) | 2.9 | 5.8 | 5.5 | 7.0 | 5.7 |
| Inflation (WPI, ann. var. %, eop) | 3.1 | 0.4 | 7.9 | 14.6 | 1.4 |
| Inflation (WPI, ann. var. %, aop) | 4.3 | 1.7 | 1.3 | 13.0 | 9.4 |
Inflation drops to lowest level since June in October
Inflation came in at 4.9% in October, which was down from September’s 5.0% but slightly exceeded market expectations. October's reading marked the weakest inflation rate since June. The slowdown was largely due to lower core inflation, with the prices of clothing, healthcare and household items all rising at a weaker pace. However, food price inflation was stable and remained elevated, likely due in part to El Niño; recent government estimates suggest that the country’s output of kharif crops—rice, maize, pulses and millets—is down year on year so far. As a result of the October result, the trend pointed down mildly, with annual average inflation coming in at 5.7% in October (September: 5.8%). Lastly, consumer prices increased 0.65% in October over the previous month, swinging from the 1.13% drop logged in September.
Our panelists expect inflation to decline to 4.7% in 2024, below the Central Bank’s projection of 5.4%. Inflation should decline as past rate hikes filter through the economy and as food prices normalize. Unexpected rises in commodity prices are an upside risk; the El Niño weather pattern could hurt agricultural output, stoking food prices, while conflicts in the Middle East and Eastern Europe could push up energy prices.
Analysts at Nomura said: “We expect vegetable prices to sharply correct in December and through Q1 2024, with headline inflation likely to average 5.3% in FY24 and 4.4% in FY25, close to the RBI’s projections.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Indian inflation projections for the next ten years from a panel of 30 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for Indian inflation.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Indian inflation projections.
Want to get access to the full dataset of Indian inflation forecasts? Send an email to info@focus-economics.com.