India Inflation Report ( September 2012)

As expected, fuel inflation jumped to 11.88% and though Food inflation was below 8% a drop of almost 1.5% to 7.86% and primary articles to an almost respectable 8.77% from above 10% the overall inflation is too high for the government already blackmailed by the prospect of rising oil prices to factor in a rate cut or ask the Reserve bank to implement one as a quid pro quo to policy reform. Manufacturing Products inflation is coasting at 6.26% from 6.14%

The CPI data for the previous month already came in at 9.7% with the Rural data even higher at 9.8% and a rate cut could artifically support the depression of prices with financial costs coming back into alignment

The WPI number for September is at 7.81% and almost threatening to take Injdia into a hyper orbit above 8.5% on the WPI basket itself as Fuel will llikely remain higher. SEB Electricity price hikes were factored into this series’ data as well

 

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