India CPI Flash - Rajesh Sharma Money Matters
“CPI April number Crosses 10%, It gets tougher for RBI on policy decision..”says Rajesh Sharma Money Matters CMD. New CPI gives jitters approximately increasing by 100 bps (A basis point (often denoted as bp, colloquially referred to in the plural as "bips", also known as a beep) is a unit equal to 1/100 of a percentage point) since the release of the first print in Jan 2012 which came in at 7.6% and followed by an 8.8% and 9.5% print in Feb and March. The latest April release comes at 10.4%. Comparing with WPI, from Jan – April the fig were 6.9%, 7.4%, 6.9% and 7.2% respectively. The key reason for the trend in the CPI from 7.6% in Jan to 10.4% in April is due to food prices which have seen the rate of inflation more than doubling from 4.5% in Jan to 10.4% in April. CPI readings ex-food and fuel remain in double digits (Ex Food: 10.5%; Ex Food/Fuel: 10.3%). Monsoon and structural factors like rise in MSP are driving the inflation higher. Going forward the trend would remain firm.
Highlights — Food prices have doubled: Trends in the food component have more than doubled from 4.5% in Jan to 10.2% in April. This is due to higher vegetable prices (which rose 25% vs. -25% levels in Jan), oils (+18%), protein-rich products (eggs, dairy products - up 10% and 15%). Apart from misc goods where CPI was up 8.4%, double-digit price rises were evident across food (+10.2%), housing (+14.8%), clothing/footwear (+12%), and fuel (+11.4%).
Tags: Rajesh Sharma Money Matte , Money Matters Financial S
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