Consumer Price Index (CPI) of India

Retail inflation soars to a 15-month high of 4.88% YoY in November 2017.

Published monthly by the Ministry of Statistics and Programme Implementation (MOSPI). Updated until the month of November 2017. (Published on December 12th, 2017)

Recent Data Trend 

In November 2017, CPI inflation accelerated to a 15-month high of 4.88% YoY, from a reading of 3.58% YoY in the previous month. This is the first time since the inception of MPC that the retail inflation has crossed the medium-term inflation target (4%) and has entered the upper end of the inflation target bandwidth.(4-6%).

The CPI inflation print beat the market expectations (Reuter's Poll) of 4.2%. The rise in inflation was experienced both in rural and urban areas with prices rising by 4.8% YoY and 4.9% YoY, respectively. The increase in headline inflation was also partially due to the unfavorable base setting in.

The rise in headline inflation was led by hardening of fuel prices and a sharp rise in food inflation. Food inflation, as measured by Consumer Price Food Index (CFPI), rose sharply to a 15-month high of 4.4% YoY from a meager 1.9% YoY in the previous month. The food inflation has been on the rise since August 2017 mainly supported by rising vegetable prices. In November 2017, the food inflation was experienced across the food group except pulses with vegetable prices soaring for the fourth straight month recording a growth of 22.48% YoY, highest rise since December 2013. However, pulses continued their deflationary trend for the 12-month straight recording a fall of 23.5% YoY.

Also, fuel and light group recorded an inflation of 7.9% YoY in November, highest since September 2013. This was mainly on account of hardening of global crude oil prices. The global crude oil price of Indian basket rose by 36.2% YoY in November 2017. In addition, housing inflation continued its upward trend reaching 7.36% YoY, highest since October 2013.

The noteworthy point is that inflation excl. food and fuel were also strongly palpable. The core inflation (CPI inflation excl. food and fuel) rose to an 8-month high of 4.65% YoY in November 2017.

We (IMA) believe that the continued acceleration in headline inflation with the unfavorable base setting in, higher HRA reflecting an increase in housing prices, firming up of global crude oil prices and with the rise in core inflation to an 8-month high will be concerning enough for RBI. Further, with CPI inflation breaching the medium term-target (4%) and the RBI's inflation projections (4.3-4.7% for the second half of FY 2017-18) is enough for RBI to keep a pause on cutting policy rates for this fiscal year.

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: January 12th, 2018