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Charts & Analysis

Aug 2011 Inflation at 9.78%

The monthly release of inflation data pointed to a sustained high rate at 9.78%, up from the provisional 9.22% last month. (Data from the Office of the Economic Adviser)

MonthlyInflation

Broken down into components, August Inflation sees an increase of all three major components:

  • Primary articles, which was on a downward trend, reverses to go up to 12.58%, from the 11.3% last month.
  • Fuel inflation continues to remain high at 12.84%
  • Manufactured Goods, the heaviest high level group (65% weight) sees an inflation of 7.79%, the highest since September 2008.

Inflation Components

Revisions: Past data is revised after two months. Revisions for June 2011, which saw a first released number of 9.44%, came in at 9.51%. This is the lowest difference in the recent past.

Inflation Revisions

Markets have taken the news positively and instantly gone up. It might be short covering as markets expected more of a rise in Inflation.

Given this data, it’s unlikely that RBI will pause the rate hike process; even the recently noticed moderation in the numbers has been reversed.

(Interactive map coming soon)