Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial

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%

That is surprisingly benign for manufactured goods, and obviously that will bring down overall inflation; manufactured goods has a 65% weight in the overall index! This doesn’t smell right, though.

Here’s the three year chart for how the inflation components move:

Inflation Components

There’s a problem with manufactured goods data here – but it’s possible if we increase the weights of TVs, Laptops and Mobile phones, of course. This needs a relook and some data crunching.

Oh and the great revision cycle is back. October Inflation, now revised:

For the month of October, 2010 the final Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) stood at 142.4 as compared to 141.7 (Provisional) and annual rate of inflation based on final index stood at 9.12 percent as compared to 8.58 percent (Provisional) reported on 15.11.2010


Like our content? Join Capitalmind Premium.

  • Equity, fixed income, macro and personal finance research
  • Model equity and fixed-income portfolios
  • Exclusive apps, tutorials, and member community
Subscribe Now Or start with a free-trial