India: Inflation falls to over five-year low in March
Latest reading: Inflation ticked down to 3.3% in March, edging down from February’s 3.6%. March’s reading was far below market expectations, represented the lowest inflation rate since August 2019, and moved further below the Reserve Bank of India’s 4.0% target. Looking at the details of the release, prices for food and beverages rose at a softer rate in March, dampened by a recently strong harvest thanks to favorable weather.
In addition, the trend pointed down mildly, with annual average inflation coming in at 4.6% in March (February: 4.8%).
Finally, consumer prices fell 0.26% from the previous month in March, a smaller decrease than the 0.47% drop seen in February.
Panelist insight: Goldman Sachs’ Santanu Sengupta and Arjun Varma said:
“Overall, we lower our food inflation forecast for CY25 by 0.4pp to 3.5% yoy. On core inflation, we raise our full year CY25 forecasts by 0.2pp to 4.1% yoy, following the latest increase in gold price forecasts by our commodities team. Overall, we slightly lower our headline inflation forecast for CY25 by 0.1pp to 3.8% yoy.”