India's CPI is likely to have grown around 5.6% y/y in December as compared with the inflation of 5.4% y/y recorded in November. The likely acceleration is because of unfavourable base effect.
"We expect the December print to be lower than that of November 2015 on a point to point basis (mom), we expect headline inflation to move up from 5.4% to 5.6%", says Societe Generale
Even though there are signs of prices stabilising, pulse price inflation is expected to be around 50% y/y. Vegetable prices is another main driver of food inflation. In spite of a sharp plunge in vegetable prices on a monthly basis, the y/y inflation is expected to be higher as December 2014 had recorded a sharper decline in vegetable prices.
