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Charts & Analysis

Interactive Inflation Map for July 2011

Every month, at MarketVision, we do an interactive page on Inflation where you can click through and find out how inflation works at various levels in the country. The latest data is for July 2011; Check out the web page.

Quick Note: What is this “Inflation” thing?

Skip if you know about the WPI and the concept of inflation.

Inflation data is released monthly. Today’s release was a provisional estimate for Jun 2011. They will revise it two months later, in September (along with the release of August provisional data).

Inflation is calculated based on the wholesale price of certain elements, which comprise our usage (supposedly). The Wholesale Price Index (WPI) is a basket of these elements, weighted appropriately. So the price of onions (1 kg worth) gets a weight of 0.17% while crude petroleum price will be 0.90%.

The basket is hierarchical – so Onions is grouped under “Vegetables“, which comes under “Fruits and Vegatables” which is further under “Food articles“->Primary Articles->Overall WPI Basket.

Each level is accorded a weight, and the broad three categories are Primary Articles (20%), Fuel (15%) and Manufactured Products (65%). The first two are revealed every week, but Manufactured product data is only announced every month, which is why the Inflation exercise can only be done once a month.

The prices announced are as a factor of the price in a “base year”, which currently is 2004-05. So a value of 198 means that the price of that item is 1.98 times the price in 2004-05 (the base is 100). We calculate inflation by comparing the price value today versus one year back.

Inflation is at 9.22%

Inflation of the entire basket is at 9.22% over last year.  This is shown in a clickable treemap with clickable squares, and the size of the elements represents the weight in the index, while the colour is a sliding scale based on this legend:

http://www.marketvision.in/data/Inflation/ColGradient.png

India Inflation

The broad components of inflation show a rise in “secondary items” – manufactured goods that eventually reflect the rise in primary level items.

Inflation Components

At 7.5% the manufactured gods inflation doesn’t look too bad, but remember that data gets revised and the past revisions released for May show that the actual numbers were higher than first reported. Here’s the recent revisions:

Inflation Revisions

Fuels Stay High, Data Not Updated

Fuel data shows worrying rises in fuel prices, and one large element – coal – has nearly no sub element updated, so when it eventually is updated things are going to be messy. (Remember that Coal India increased prices many times recently)

Fuel and power

Interesting Sub-charts

Spices are showing some serious volatility:

image

and at a higher level, non-food articles still has a high increase, but it seems to be coming down from earlier months:

image

Want to see the real thing?

Click here. (And tell us what you think!)