Consumer Price Index (CPI) of India

CPI inflation eased to a 4-month low in Feb'18 on account of favorable base effect and softening food inflation.

Published monthly by the Ministry of Statistics and Programme Implementation (MOSPI). Updated until the month of February 2018. (Published on March 12th, 2018)

Recent Data Trend 

India CPI inflation softened to 4.4% year-on-year (YoY) in Feb'18, from more than 5% YoY growth in Jan '18. The inflation print was lower than the market expectations of a slowdown to 4.8% YoY (Reuter's poll). The softening of headline inflation was on account of a decline in food inflation and a favorable base effect at work. The food inflation (as indicated by Consumer Food Price Index (CFPI)), fell to 3.3% YoY in Feb'18, lowest since Oct '17. The vegetable prices witnessed a significant fall in inflation, while the price of pulses continued to fall for the 15th consecutive month (17.1% YoY fall in Feb'18)

The ease in CPI inflation in Feb '18 might be considered a welcome news by many, but it will be too early to cheer about this decline. Looking at core inflation, which excludes food and fuel from the headline inflation, we see that it remained sticky at around 5% YoY for the third consecutive month.

Prima facie, the fall in inflation seems broad-based as all the groups (except Miscellaneous) witnessed a moderation in inflation in Feb '18 from the previous month. But, the majority seems to be experiencing a favorable base-effect.

We believe that it is too early to celebrate the fall in inflation.The inflation prints have to be observed with caution in the near future to determine whether the slowdown is temporary in nature or not. The RBI expects inflation during Jan-Mar '18 to average around 5.1% YoY, and given the better than expected slowdown in inflation in Feb '18, the RBI is likely keep rates on hold in the Apr'18 meet.

Brief Overview

Consumer Price Index in India is published monthly by the Central Statistical Organization (CSO). Consumer Price Indices (CPI) measure changes over time in the general level of prices of goods and services that households acquire for the purpose of consumption. CPI is widely used as a macroeconomic indicator of inflation, as a tool by governments and central banks for inflation targeting and for monitoring price stability, and as deflators in the national accounts. CPI is also used for indexing dearness allowance to employees for the increase in prices.

The data we present above is in the base year 2012. Monthly price data are collected from 1114 markets in 310 selected towns by the Field Operations Division of NSSO and the specified State/UT Directorates of Economics and Statistics and from 1181 selected villages by the Department of Posts.  The prices are being collected through Web Portals.  Web portal for rural prices was developed by NIC and for urban prices by the Computer Centre in MoSPI.

For more information visit the official government website.

Consumer Price Inflation, Sub-groups

Consumer Price Index-Quarterly

Next Release Date: April 12th, 2018