Upside inflation risks are building in India. Damage to crops from bad weather has caused spikes in vegetable prices recently. And base effects aren’t helpful: food inflation will accelerate in year-on-year terms over the next few months even if prices are flat. Meanwhile, there is no sign yet that the Omicron variant is spreading at speed. But if it does, and further containment measures are implemented in response, that would probably push inflation up too. Whereas lockdowns were initially disinflationary in other countries, India’s two lockdowns both caused measures of core CPI inflation to jump by around 1%-pt.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services