India Inflation Rate Lower than Expected

Annual consumer inflation in India declined to 2.05 percent in January of 2019 from a downwardly revised 2.11 percent in December, below market expectations of 2.48 percent. It is the lowest inflation rate since June of 2017 as food prices continued to decline. The Reserve Bank of India recently lowered its inflation forecasts to 2.8 percent for January-March 2019, mentioning a deflation in food items and a sharp fall in fuel inflation.

Prices of food and beverages declined 1.29 percent and the food index alone dropped 2.17 percent. Prices went down for vegetables (-13.32 percent), sugar and confectionery (-8.16 percent), pulses and products (-5.5 percent), fruits (-4.18 percent) and eggs (-2.44 percent).

Among non-food products, prices increased for miscellaneous (6.04 percent); pan, tobacco and intoxicants (5.62 percent); housing (5.2 percent); clothing and footwear (2.95 percent); and fuel and light (2.2 percent).

The corresponding provisional inflation rates for rural and urban areas were 1.29 percent and 2.91 percent, compared with December's figures of 1.5 percent and 2.91 percent respectively.

On a monthly basis, consumer prices fell 0.29 percent, after dropping an upwardly revised 0.49 percent in December, the biggest monthly decline in two years.

India Inflation Rate Lower than Expected

Joana Taborda |
2/12/2019 12:22:28 PM