The monthly release of inflation data pointed to a sustained high rate at 9.78%, up from the provisional 9.22% last month. (Data from the Office of the Economic Adviser)
Broken down into components, August Inflation sees an increase of all three major components:
- Primary articles, which was on a downward trend, reverses to go up to 12.58%, from the 11.3% last month.
- Fuel inflation continues to remain high at 12.84%
- Manufactured Goods, the heaviest high level group (65% weight) sees an inflation of 7.79%, the highest since September 2008.
Revisions: Past data is revised after two months. Revisions for June 2011, which saw a first released number of 9.44%, came in at 9.51%. This is the lowest difference in the recent past.
Markets have taken the news positively and instantly gone up. It might be short covering as markets expected more of a rise in Inflation.
Given this data, it’s unlikely that RBI will pause the rate hike process; even the recently noticed moderation in the numbers has been reversed.
(Interactive map coming soon)
