Indian Inflation Rises Less Than Expected on Food

India’s inflation rose less than expected in March, taking pressure off the central bank for more action after it unexpectedly tightened monetary policy last week.

Key Points

  • Consumer prices rose 3.81 percent in March from a year earlier, the Statistics Ministry said in a statement from New Delhi on Wednesday
  • That’s slower than the 3.94 percent median estimate in a Bloomberg survey of 38 economists and compares with a February reading of 3.65 percent
  • Industrial production fell 1.2 percent in February after rising 2.7 percent in January; economists had predicted a 1.3 percent gain
  • Big Picture

    The data gives the Reserve Bank of India time to assess the outlook for the $2-trillion economy after Governor Urjit Patel last week unexpectedly raised the reverse repo rate to fight inflation, following the U.S. Federal Reserve in withdrawing stimulus. The numbers further indicate the impact of demonetization is waning, though other indicators point to strengthening activity and rising employment.

    Details

  • Consumer food prices eased to 1.93 percent from February’s 2.01 percent
  • Housing costs rose 4.96 percent
  • Fuel costs climbed 5.56 percent
  • Bloomberg

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    Dean Popplewell

    Dean Popplewell

    Vice-President of Market Analysis at MarketPulse
    Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
    Dean Popplewell