India: Inflation rises again, above expectations
April 14, 2011
In March, the wholesale price index (WPI) - India's headline inflation measure - added 1.37% over the previous month, which was well above the virtually flat print recorded in February. Owing to the strong monthly figure, annual WPI inflation jumped from 8.3% to 9.0%, which overshot market expectations that had WPI inflation inching up to 8.4%. In line with developments observed around the world, the main driver behind the March WPI increase was higher fuel and power prices (+3.87% month-on-month). Moreover, higher prices for manufactured products, in particular textiles, contributed to the monthly price increase. Meanwhile, the slightly dated consumer price index for industrial workers (CPI-IW) dropped 1.60% in February over the previous month, thus reversing the 1.62% monthly price rise observed in January. As a result, annual consumer price inflation moderated slightly to 8.8% (January: 9.3%). Despite the strong monthly figure, annual average WPI inflation inched down to 9.1%.