Wholesale Prices (Jun.)

Wholesale price inflation dropped for the first time in five months in June and is set to fall sharply over the coming months as commodity prices drop back. With headline CPI inflation also likely to have peaked last month, we remain comfortable with our view that policy rate hikes will not come onto the agenda until well into next year.
Darren Aw Asia Economist
Continue reading

More from India

India Economics Weekly

Telecoms lifeline, autos constraints, bank liquidity

India's struggling telecoms firms were thrown a lifeline this week after parliament approved a four-year moratorium on dues owed to the government. One potential consequence is that telecoms firms are required to raise prices in order to lift revenues, which would boost inflation. Meanwhile, global semiconductor shortages have been weighing on India's auto sector, which will prove a headwind to the broader industrial recovery.

17 September 2021

India Economics Update

Three points on banking sector liquidity

Measures by the Reserve Bank to drain banking sector liquidity have caught attention over the past few days. But with liquidity still abundant, interbank rates at the very bottom of the rate corridor and financial conditions exceptionally loose, these measures represent marginal tweaks rather than a tightening of policy.

14 September 2021

India Data Response

Wholesale Prices (Aug.)

Following the weaker-than-expected consumer price inflation data for August released yesterday, headline wholesale price inflation data released today surprised to the upside. But it should resume dropping before long, particularly if commodity prices fall back as we expect. In all, there’s little in the August inflation data to pressure the RBI to start tightening policy.

14 September 2021

More from Darren Aw

India Data Response

Consumer Prices (Jun.) & Industrial Production (May)

India’s consumer price inflation remained above the 6% upper limit of the RBI’s target range for a second consecutive month in June. But if we are right in thinking that inflation has peaked, the central bank won’t see a need to tighten policy anytime soon, especially while the economy is still weak.

12 July 2021

India Economics Weekly

Inflation concerns will prove misplaced

A further jump in government bond yields in India this week points to growing expectations of monetary tightening, perhaps fuelled by concerns over rising inflation. But while CPI data next week are likely to show a further rise in headline inflation, we think that will be the peak. And given the significant downside risks to the economic recovery, we continue to expect policy normalisation to only begin next year.

9 July 2021

India Economics Update

A closer look at India’s vaccine supply projections

The government’s latest vaccine supply projections suggest that India could fully vaccinate all adults by year end. But that hinges on optimistic assumptions about production and distribution. Unless supply and logistical issues constraining the rollout are swiftly resolved, the risk of fresh outbreaks will remain a significant threat to the recovery.

7 July 2021
↑ Back to top