Monday January 14 2019
India Inflation Rate Slows Further in December
Joana Taborda | joana.taborda@tradingeconomics.com

Annual consumer inflation in India declined to 2.19 percent in December of 2018 from 2.33 percent in November, matching market expectations of 2.2 percent. It is the lowest inflation rate since June of 2017 as food prices continued to decline and inflation eased for clothing, housing and fuel.

Prices of food and beverages declined 1.49 percent (-1.69 percent in November) and the food index alone dropped 2.51 percent after a record 2.61 percent decline in the previous month. Prices went down for vegetables (-16.14 percent compared to -15.59 percent in November), sugar and confectionery (-9.22 percent compared to -9.02 percent), pulses and products (-7.13 percent compared to -9.22 percent), eggs (-4.34 percent compared to -3.92 percent) and fruits (-1.41 percent compared to +0.21 percent).

Among non-food products, prices increased less for pan, tobacco and intoxicants (5.77 percent compared to 6.14 percent); clothing and footwear (3.52 percent compared to 3.53 percent); housing (5.32 percent compared to 5.99 percent); and fuel and light (4.54 percent compared to 7.39 percent); but rose slightly faster for miscellaneous (6.45 percent compared to 6.15 percent).

The corresponding provisional inflation rates for rural and urban areas were 1.65 percent and 2.91 percent, compared with November's figures of 1.71 percent and 3.12 percent respectively.

On a monthly basis, consumer prices fell 0.43 percent, the biggest monthly decline in two years.




Monday January 14 2019
India December Wholesale Inflation Slows to 8-Month Low
Office of the Economic Advisor, India l Chusnul Ch Manan| chusnul@tradingeconomics.com

Wholesale prices in India rose by 3.8 percent year-on-year in December 2018, slowing from a 4.64 percent gain in the prior month and below than market estimates of 4.42 percent. It was the lowest wholesale inflation since April, as cost increased at a softer pace for fuel and manufactured products while prices of food declined further.

In December, cost went up at a softer pace for fuel & power (8.38 percent vs 16.28 percent in November) and manufactured products (3.59 percent vs 4.21 percent), amid slowing prices of basic metals (9.33 percent vs 12.44 percent), food products (0.24 percent vs 0.7 percent), chemical & chemical products (6.01 percent vs 7.47 percent) and textiles (5.30 percent vs 5.49 percent). 
 
Meanwhile, prices of primary articles rose faster (2.28 percent vs 0.88 percent in a month earlier), including cereals (7.59 percent vs 7.23 percent), wheat (9.61 percent vs 9.18 percent) and minerals (14.89 percent vs 6.97 percent). Also, cost fell less for food articles (-0.07 percent vs -3.31 percent) and vegetables (-17.55 percent vs 26.98 percent).
 
On a monthly basis, wholesale prices decreased by 1.40 percent, following a 0.1 percent rise in November.
 
 




Friday December 14 2018
India November Wholesale Inflation Slows to 3-Month Low
Office of the Economic Adviser l Rida | rida@tradingeconomics.com

Wholesale prices in India rose by 4.64 percent year-on-year in November 2018, slowing from a 5.28 percent gain in the prior month and slightly below than market estimates of 4.7 percent. It was the lowest wholesale inflation since August, as cost increased at a softer pace for fuel and manufactured products while prices of food declined further.

In November, cost went up at a slower rate for fuel & power (16.28 percent vs 18.44 percent in October) and manufactured products (4.21 percent vs 4.49 percent), amid lower prices of basic metals (12.44 percent vs 13.8 percent), food products (0.7 percent vs 1.01 percent), chemical & chemical products (7.47 percent vs 7.6 percent) and textiles (5.49 percent vs 5.59 percent). 

In addition, prices of primary articles rose less (0.88 percent vs 1.79 percent in a month earlier), as cost of food dropped further (-3.31 percent vs -1.49 percent), namely vegetables (-26.98 percent vs -18.65 percent) and onion (-47.6 percent vs -31.69 percent).

On a monthly basis, wholesale prices increased by 0.1 percent, following a 0.7 percent rise in October.


Wednesday December 12 2018
India Inflation Rate Lowest in Near 1-1/2 Years
Joana Taborda | joana.taborda@tradingeconomics.com

Annual consumer inflation in India declined to 2.33 percent in November of 2018 from an upwardly revised 3.38 percent in October and below market expectations of 2.8 percent. It is the lowest inflation rate since June of 2017 as food prices fell the most since the series began in 2012. The Reserve Bank of India revised down its inflation forecasts to 2.7 percent-3.2 percent for the period Oct 2018-March 2019, amid lower food and fuel prices.

Prices of food and beverages declined 1.69 percent and the food index alone dropped at a record 2.61 percent. Prices went down for vegetables (-15.59 percent), pulses and products (-9.22 percent), sugar and confectionery (-9.02 percent) and eggs (-3.92 percent) and edged up a meager 0.21 percent for fruits. 

Among non-food products, prices increased for pan, tobacco and intoxicants (6.14 percent); clothing and footwear (3.53 percent); housing (5.99 percent); fuel and light (7.39 percent); and miscellaneous (6.15 percent).

The corresponding provisional inflation rates for rural and urban areas were 1.71 percent and 3.12 percent, compared with October's figures of 2.82 percent and 1.04 percent respectively.

On a monthly basis, consumer prices rose 0.07 percent.


Wednesday December 05 2018
India Leaves Rates Steady as Expected
RBI | Joana Taborda | joana.taborda@tradingeconomics.com

The Reserve Bank of India left its key policy rate steady at 6.5 percent for the second straight meeting on December 5th 2018, in line with market expectations. Policymakers reiterated the decision is consistent with a calibrated tightening that aims to achieve a 4 percent +/- 2 percent inflation target and support growth. The reverse repo rate was also left at 6.25 percent and the marginal standing facility rate and the Bank Rate at 6.75 percent each.

Excerpts from the RBI Press Release:

There have been several important developments since the October policy which will have a bearing on the inflation outlook. First, despite a significant scaling down of inflation projections in the October policy primarily due to moderation in food inflation, subsequent readings have continued to surprise on the downside with the food group slipping into deflation. Secondly, in contrast to the food group, there has been a broad-based increase in inflation in non-food groups. Thirdly, international crude oil prices have declined sharply since the last policy; the price of Indian crude basket collapsed to below US$ 60 a barrel by end-November after touching US$ 85 a barrel in early October. Fourthly, global financial markets have continued to be volatile with EME currencies showing a somewhat appreciating bias in the last one month. Finally, the effect of the 7th Central Pay Commission’s HRA increase has continued to wane along expected lines. Taking all these factors into consideration and assuming a normal monsoon in 2019, inflation is projected at 2.7-3.2 per cent in H2:2018-19 and 3.8-4.2 per cent in H1:2019-20, with risks tilted to the upside.

Turning to growth projections, although Q2 growth was lower than that projected in the October policy, GDP growth in H1 has been broadly along the line in the April policy when for the year as a whole GDP growth was projected at 7.4 per cent. Going forward, lower rabi sowing may adversely affect agriculture and hence rural demand. Financial market volatility, slowing global demand and rising trade tensions pose negative risk to exports. However, on the positive side, the decline in crude oil prices is expected to boost India’s growth prospects by improving corporate earnings and raising private consumption through higher disposable incomes. Increased capacity utilisation in the manufacturing sector also portends well for new capacity additions. There has been significant acceleration in investment activity and high frequency indicators suggest that it is likely to be sustained. Credit offtake from the banking sector has continued to strengthen even as global financial conditions have tightened. FDI flows could also increase with the improving prospects of the external sector. The demand outlook as reported by firms polled in the Reserve Bank’s IOS has improved in Q4. Based on an overall assessment, GDP growth for 2018-19 has been projected at 7.4 per cent (7.2-7.3 per cent in H2) as in the October policy, and for H1:2019-20 at 7.5 per cent, with risks somewhat to the downside.




Friday November 30 2018
India GDP Growth Slows More than Anticipated
Joana Taborda | joana.taborda@tradingeconomics.com

The Indian economy advanced 7.1 percent year-on-year in the third quarter of 2018, well below 8.2 percent in the previous period and market expectations of 7.4 percent. It is the lowest growth rate in three quarters, mainly due to a slowdown in consumer spending amid high oil prices and a weaker rupee. Also, inventories, financial services, manufacturing and the farm sector rose less.

Household spending (7 percent compared to 8.6 percent in the previous period) and inventories (3.8 percent compared to 8.6 percent) slowed. On the other hand, government spending (12.7 percent compared to 7.6 percent), gross fixed capital formation (12.5 percent compared to 10 percent), exports (13.4 percent compared to 12.7 percent) and imports (25.6 percent compared to 12.5 percent) rose faster. Household spending accounted for 54.5 percent of the GDP (54.9 percent in Q2); gross fixed capital formation for 32.3 percent (31.6 percent in Q2); public expenditure for 12.4 percent (11.8 percent in Q2); and changes in stocks for 0.7 percent, the same as in Q2. Exports accounted for 21.8 percent (21.4 percent in Q2) while imports subtracted 26.6 percent (-24.7 percent in Q2). 

Gross Value Added, that is, GDP excluding taxes expanded 6.9 percent, below 8 percent in the previous period. A slowdown was seen in financial, real estate and professional services (6.3 percent compared to 6.5 percent); manufacturing (7.4 percent compared to 13.5 percent in the previous period); agriculture, forestry and fishing (3.8 percent compared to 5.3 percent); and construction (7.8 percent compared to 8.7 percent); and mining shrank (-2.4 percent compared to 0.1 percent). On the other side, faster increases were seen for trade, hotel, transport, communication and services related to broadcasting (6.8 percent compared to 6.7 percent); and public administration and defence (10.9 percent compared to 9.9 percent).




Wednesday November 14 2018
India Wholesale Inflation at 4-Month High of 5.28%
Office of the Economic Adviser l Rida | rida@tradingeconomics.com

Wholesale prices in India rose by 5.28 percent year-on-year in October 2018, after a 5.13 percent gain in the prior month and above market estimates of 5 percent. It was the highest wholesale inflation since June, as cost advanced faster for fuel and manufactured products.

In October, cost went up at a faster rate for fuel & power (18.44 percent vs 16.65 percent) and manufactured products (4.49 percent vs 4.22 percent in September), amid higher prices of basic metals (13.80 percent vs 12.78 percent), food products (1.01 percent vs 0.78 percent), chemical & chemical products (7.60 percent vs 7.19 percent) and textiles (5.59 percent vs 5.04 percent). 

Contrarily, prices of primary articles slowed to 1.79 percent (from a 2.97 percent rise in a month earlier), as cost of food dropped further (-1.49 percent vs -0.21 percent), namely eggs, meat & fish (-0.59 percent vs -0.52 percent), vegetables (-18.65 percent vs -3.83 percent) and onion (-31.69 percent vs -25.23 percent).

On a monthly basis, wholesale prices rose 0.7 percent, the same as in September.


Monday November 12 2018
India Inflation Rate Lowest in Near 1 Year
Joana Taborda | joana.taborda@tradingeconomics.com

Annual consumer inflation in India fell to 3.31 percent in October of 2018 from a downwardly revised 3.7 percent in September and below market expectations of 3.67 percent. It is the lowest inflation rate since September of 2017, mainly due to a drop in cost of food.

Prices of food and beverages declined 0.14 percent, following a 1.08 percent rise in September and the food index alone dropped 0.86 percent, after a 0.51 percent gain in the previous month. It is the biggest fall in food cost since June of 2017. Prices went down for vegetables (-8.06 percent), pulses and products (-10.28 percent) and sugar and confectionery (-7.64 percent) but rose slightly for fruits (0.35 percent).
 
Among non-food products, prices increased for pan, tobacco and intoxicants (6.13 percent); clothing and footwear (3.55 percent); housing (6.55 percent); fuel and light (8.55 percent); and miscellaneous (6.73 percent).
 
The corresponding provisional inflation rates for rural and urban areas were 2.82 percent and 3.97 percent, compared with September's figures of 3.27 percent and 4.31 percent respectively.
 
On a monthly basis, consumer prices rose 0.29 percent.


Monday October 15 2018
India Wholesale Inflation Rises More than Expected
Office of the Economic Adviser l Rida | rida@tradingeconomics.com

Wholesale prices in India rose by 5.13 percent year-on-year in September of 2018, after a 4.53 percent gain in the prior month and above market estimates of 4.9 percent. Cost of manufacturing products and fuel continued to rise while prices of food fell much less.

In September, cost of manufactured products increased 4.22 percent, after a 4.43 percent rise in August; while cost of fuel and power  went up 16.65 percent, compared to a 17.73 percent rise in a month earlier. Meantime, cost of primary articles rose 2.97 percent, following a 0.15 percent fall in a month earlier, as cost of food dropped much less (-0.21 percent vs -4.04 percent in August), namely onion (-25.5 percent); vegetables (-3.83 percent) and fruits (-7.35 percent). 

On a monthly basis, wholesale prices rose 0.7 percent, compared to a 0.3 percent gain in August.


Friday October 12 2018
India Inflation Rate Rises Less than Forecasts
Joana Taborda | joana.taborda@tradingeconomics.com

Annual consumer inflation in India edged up to 3.77 percent in September of 2018 from 3.69 percent in August, but below market expectations of 4 percent. Food inflation increased only slightly, in line with central bank expectations. Earlier in the week, the Reserve Bank of India cut its inflation forecasts to 4 percent from 4.6 percent in Q2:2018-19 (July-September 2018), mentioning low food inflation.

Food and beverages inflation went up to 1.08 percent from 0.85 percent in August and the food index alone rose 0.51 percent, slightly higher than 0.29 percent in August. Prices rose faster for prepared meals, snacks, sweets etc. (4.41 percent compared to 4.16 percent); and non-alcoholic beverages (2.1 percent compared to 1.86 percent). On the other hand, inflation slowed for fruits (1.12 percent compared to 3.57 percent in August); milk and products (2.58 percent compared to 2.66 percent); eggs (3.76 percent compared to 6.96 percent); meat and fish (2.32 percent compared to 3.21 percent); oils and fats (3.21 percent compared to 3.47 percent); and was flat for spices (2.88 percent, the same as in August). Also, prices fell for vegetables (-4.15 percent compared to -7 percent); pulses and products (-8.58 percent compared to -7.76 percent); and sugar and confectionery (--6.42 percent compared to -5.81 percent).   
Among non-food products, prices rose at a faster pace for pan, tobacco and intoxicants (5.57 percent compared to 5.34 percent); and miscellaneous (5.65 percent compared to 5.52 percent) but were softer for housing (7.07 percent compared to 7.59 percent); and clothing and footwear (4.64 percent compared to 4.88 percent). Inflation was unchanged for fuel and light (8.47 percent, the same as in August).
The corresponding provisional inflation rates for rural and urban areas were 3.34 percent and 4.31 percent, compared with August's figures of 3.41 percent and 3.99 percent respectively.
On a monthly basis, consumer prices fell 0.07 percent in August, after a 0.43 percent gain in August.