Fairval

Notes on Indian equities, sectors and economy

WPI March – Govt massages data again

Posted by fairval on April 16, 2010

On WPI, we have been saying for a few months now that the government is massaging data. So March data isn’t such a surprise. Government has managed to keep reported WPI under 10% for 2 months in a row on. In Feb, it was 9.89%, and now, it is 9.90%.

Check what we had written in a post in Feb (https://fairval.wordpress.com/2010/02/15/wpi-8-56-for-jan-shud-peak-in-feb/) —

WPI has room to grow till 10 percent. Our data suggests on ground inflation was around 10-12 percent in January, higher than the government figure.

Politically, it may not be acceptable to let inflation rise beyond 10percent, so the government may be tempted to control reported WPI to a shade below 10 percent. We would expect the rise to peter out at about 9.5 percent or so, which may well happen in Feb. WPI could then start coming down from March/April onwards.

This is almost what the government has done. WPI has greater than 10% for a few months, around Nov-Jan period, but the government has kept the data under 10%.

WPI should have peaked now, and should ideally begin to fall.

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2 Responses to “WPI March – Govt massages data again”

  1. Aditya said

    how’d you calibrate whether you are passing the hump or its an extended higher inflation plane?

  2. Aditya said

    I guess also what makes a difference – fwdlooking is how m/m trends look as much as the y/y

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