India: Inflation jumps in June after falling to lowest level in more than three years
July 15, 2013
In June, the wholesale price index (WPI) - India's preferred inflation measure - jumped 0.64% over the previous month, which came in well above the revised 0.18% increase recorded in May (previously reported: 0.06% month-on-month). The monthly jump reflects higher prices for primarily products, mainly for food, as well as higher costs for fuel and electricity.
After falling to its lowest level in over three years in May (4.7% year-on-year), annual headline WPI inflation climbed to 4.9%, which, nonetheless, fell short of market expectations that had annual wholesale prices rising to 5.0%. Despite the annual increase, annual average WPI inflation declined from 6.9% in May to 6.7% in June.
Meanwhile, also in June, the consumer price index jumped 1.70% over the previous month. The reading was above the 0.86% rise registered in May and marks the highest monthly increase on record. As a result, annual inflation rose from 9.3% in May to 9.9% in June, the highest level since March.
FocusEconomics Consensus Forecast panellists anticipate wholesale price inflation to average 6.5% in fiscal year 2013/14, which is down 0.1 percentage points from last month's forecast. In the fiscal 2014/15, the panel anticipates wholesale price inflation to average 6.2%.
Author: Ricardo Aceves, Senior Economist