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Charts & Analysis

CPI Inflation for March 2013 at 10.39%, Too High For Comfort

Consumer Price Inflation came in at 10.39% for March 2013, down from the Feb 2013 number of 10.91%. This is still way too high a number for comfort, given that it’s prices consumers face. Wholesale price numbers come in on Monday but recently there has been a huge divergence between the two.

WPI vs CPI

From a component perspective, the most heavily weighted item (Food) went up more than 12%, which seems to be  a little better than the 13% last month.

CPI Components

(The size of the circles above is the weight of the item in the index).

And then we have Urban versus Rural inflation, where Rural Inflation is down a little from the 11% number last month, while Urban inflation remains steady at 11.45%.

Inflation Urban vs. Rural

Monday will bring the WPI numbers in, but I’m sure the RBI will consider CPI numbers too when thinking about whether to reduce rates. Right now, the CPI numbers look too high; but a sharp drop in the WPI numbers might swing it for a rate reduction.