So when someone talks about “Inflation at 13 year highs” – here’s what they really mean. This graph (click for larger view) is from data collected all the way back to 1994, when the index was at 100. (Obviously inflation data is from 1995, to compare year-on-year)
Inflation is now the highest it has ever been since the WPI data was notified on the site. At 12.01% it is way above the peaks in 2000-01 and 2004-05 (both around 8.5%).
Anyone have quality data on interest rates? I would like to plot the chart alongside.
Inflation should reduce, one thinks, with reducing crude prices and a falling dollar (which went to 41.8, closed at 42.05). But crude doesn’t impact us much unless our fuel prices fall – and given the PSU losses out there that is unlikely to happen soon. The falling dollar – that should work, if the RBI continues to let it slide to levels below 40.
Note: To be “reasonable” inflation, we need to at least get below 8.5%. How long will that take? I’m a curious observer.