India Inflation Rate Lowest Since November 2014


Consumer prices in India increased 3.41 percent year-on-year in December of 2016, following a 3.63 percent rise in November and below market expectations of 3.57 percent. It is the lowest inflation rate since November of 2014 as food prices cooled. The slowdown in inflation intensified in the last two months of 2016 after a demonetization campaign slumped currency in circulation, hurting consumption.

Year-on-year, cost of food and beverages rose 1.98 percent (2.56 percent in November), provisional estimates showed. The food index alone increased by 1.37 percent compared to 2.11 percent in the previous month. Prices increased less for sugar (+21.06 percent from +22.4 percent in November) and fell for pulses (-1.57 percent from +0.23 percent) and vegetables (-14.59 percent from -10.29 percent) while cost of fruit rose slightly more (4.74 percent from 4.6 percent). 

Inflation also eased for clothing and footwear (4.88 percent from 4.98 percent) and housing (4.98 percent from 5.04 percent) but accelerated for fuel and light (3.77 percent from 2.8 percent). 

The corresponding provisional inflation rates for rural and urban areas are 3.83 percent and 2.9 percent (4.13 percent and 3.13 percent respectively in November).

A year ago, the inflation rate was higher at 5.61 percent.

On a monthly basis, consumer prices fell 0.61 percent.

India Inflation Rate Lowest Since November 2014


Joana Taborda | joana.taborda@tradingeconomics.com
1/12/2017 12:40:44 PM