Inflation

PA Inflation at 18.44% for Jan 22

The Primary Articles Inflation has now perked up again, going to 18.44% on 22 Jan 2011, up from the 17.26% reported last week.

Primary Articles Inflation

We're in for some serious headline inflation in the next month or so because last year was benign in Jan/Feb. (Although that "benign" was above 20%!)

PA Inflation at 17.26%, up from last week

For the week ended 15 Jan 2011, Inflation picked up a little, with primary articles going to 17.26%. This is marginally higher than last week's 17.03%.

Primary Articles Inflation

And as usual, the past revisions continue.

Primary Articles Inflation at 17.03%

For the week ended 8 Jan 2011, Primary Articles inflation ended at 17.03%, coming of the 20% highs we saw recently.

Primary Articles Inflation Chart

December Inflation at 8.43%, Sounds Too Low

The latest release says the December 2010 overall inflation is at 8.43%. Interestingly, manufactured goods saw only a 4.46% inflation, but Fuel saw 11.19% and Primary Articles saw 16.46%.

December Inflation at 8.43%

Primary Articles Inflation at 17.58%

The first data of 2011 is out – Data for Jan 1, 2011 shows Primary Articles at 17.58%.

Primary Articles Inflation Chart

As usual, the revisions of past data are huge.

Primary Articles Inflation Up to 20%

Welcome, 2011. The last week of the 2010 – as of December 25th – now shows Primary Articles Inflation at 20.2%.

Primary Articles Inflation at 20.2%

Primary Articles Inflation at 15.35%, up 2%

Primary articles is up 2% since last week, and stands at 15.35%.

Primary Articles Inflation at 15.35%

I’d mentioned that last year this was a benign period, and I expect headline inflation numbers to stay high for the next few weeks anyway. Add to it the fuel price hikes, skyrocketing onion prices, increase in sugar prices (not yet in India) and the transition into manufactured goods and WPI as a whole is likely to stay very high.

(Note: Overall inflation is only reported once a month. PA inflation is announced every week)

Past revisions continue to be a problem, as the 16 Oct. data was revised to 17.91%, substantially higher than the first reported 16.62%.

Primary Articles Inflation Revisions

 

RBI Keeps Rates Unchanged; Liquidity Tight

RBI keeps rates unchanged at 6.25% (repo) and 5.25% (reverse repo). 

The Statutory Liquidity Ratio (SLR) is down to 24% (down 1%). There’s also a relaxation of another 1% of assets under a temporary liquidity facility until Jan 28, 2011.

Inflation: November 2010

WPI monthly inflation for Nov 2010 was announced at 7.48% – substantially lower than the last month’s 8.58%.