India Inflation Rate at 5-Month High in August

Consumer prices in India increased 3.36 percent year-on-year in August of 2017, following a 2.36 percent rise in July and above market expectations of 3.2 percent. It is the highest inflation rate since March, due to a rebound in food prices. The Reserve Bank of India expects inflation at 2 percent - 3.5 percent in the first half of this fiscal year (April to September 2017) and at 3.5 percent - 4.5 percent in the second half (October 2017 to March 2018).

Prices went up at a faster pace for food and beverages (1.96 percent compared to 0.43 percent in July). The food index alone jumped 1.52 percent, recovering from a 0.29 percent drop in July. Prices surged for vegetables (6.16 percent compared to -3.57 percent) and fruits (5.29 percent compared to 2.83 percent) while cost of pulses fell slightly less (-24.43 percent compared to -24.75 percent). In addition, prices went up faster for housing (5.58 percent from 4.98 percent); fuel and light (4.94 percent compared to 4.86 percent in July) and clothing and footwear (4.58 percent compared to 4.22 percent).

The corresponding provisional inflation rates for rural and urban areas are 3.3 percent and 3.35 percent (2.41 percent and 2.17 percent respectively in July).

Joana Taborda |
9/12/2017 12:25:13 PM