Notes on Indian equities, sectors and economy

Indian Inflation – Reflecting Fairval’s prediction

Posted by fairval on January 15, 2010

Whilesale inflation came out at 7.31% for Dec’09. This is what we had written in early Oct in a post on inflation (https://fairval.wordpress.com/2009/10/01/the-true-inflation-situation-in-india/)  –

Wholesale inflation never fell to zero (that is, if you believe WPI-F is more accurate than WPI-O)

Wholesale inflation has already crossed 6% (as of Sep). We believe it may get up to 8-10% by Mar10. This is because fuel prices may inch up, while food grain inflation may persist due to poor monsoon.
In other words, we think analysts and economists are missing the true inflation picture. Most of them are saying – inflation will go up to 6% by Mar 10. We think it is already there, and could well end up at 8-10% by March.

When we wrote inflation should cross 8% by March, official WPI data was 0.96%.


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