- Wealth PMS
CPI Inflation reared its ugly head again, moving up to 9.87% in June 2013.
WPI comes in on Monday, and even that’s likely to go up. Where have things gone awry?
Components wise, Food is still nuts at 11%+ and Housing comes close at 10.7%. Fuel’s going up because of the recent increase in petrol and diesel prices.The rest are benign, but the biggest components are way high.
Inflation goes back up in both rural and urban zones. Urban inflation is now near the highest ever. Yes, this could be due to the rupee fall.
The return of high inflation and a drop in the rupee will definitely cause WPI inflation to rise as well. The difference of nearly 5% between the two measures makes no sense. If the WPI number does rise beyond 5%, we are likely to see the RBI hold off its rate cutting cycle for another quarter.