India Wholesale Inflation Below Expectations


Wholesale prices in India rose 3.85 percent year-on-year in April of 2017, following a downwardly revised 5.29 percent gain in March and well below market estimates of 4.8 percent. It is the lowest wholesale inflation in four months after the government revised the base year.

Year-on-year, biggest upward pressure came from cost of manufactured products (2.66 percent), primary articles (1.82 percent) and fuel and power (18.52 percent). 

On a monthly basis, wholesale prices declined 0.18 percent.

The base year was revised to 2011-12 from 2004-05, aiming to align it with the base year of other indicators like the GDP and the industrial production index. It is the sixth revision in the base year since the series began, changing the basket of commodities and assigning new weights: the number of items in the basket went up to 697 from 676; 199 new items were added and 146 old removed; prices will not include indirect taxes; a new food index will be compiled to capture the rate of inflation in food items. In addition, seasonality of fruits and vegetables has been updated to account for more months as these are now available for longer duration.

Office of the Economic Adviser | Joana Taborda | joana.taborda@tradingeconomics.com
5/12/2017 1:17:53 PM