India: Inflation picks up in March from February
Latest reading: Consumer prices increased 3.4% in annual terms in March, following a 3.2% increase in the prior month. March’s reading was the highest in a year and in line with market expectations, but remained below the Reserve Bank of India’s 4.0% target despite the Iran war, thanks to government measures to protect consumers.
Relative to the prior month’s data, there were higher price pressures for food and non-alcoholic beverages (+3.7% in annual terms vs +3.4% in February) and transportation (+3.7% vs +3.4% in February). Finally, the variation in clothing prices was the same as in the prior month (+2.8% in March and February).
Lastly, consumer prices were up 0.26% in March on a month-on-month basis, following a 0.11% increase in the prior month.
Panelist insight: Nomura’s Aurodeep Nandi and Sonal Varma commented:
“Further transmission of price pressures should be visible in the coming months, given the broad-based rise in input cost pressure and rising margin pressure for firms. We assume pump prices will be left unchanged, but below-normal rains and El Niño are risks to food price inflation.”