Transcript Inflation

Inflation Measurement
M.C. Singhi
Price Increase- How is it assessed
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Commodity Prices
Price Indices
User Groups
Source Agencies
Method of Compilation
Communication & Use
Inflation Measurement
• Wholesale Price Index
• Consumer Price Indices
• GDP Deflator
Indices for Inflation Measurement - Salient features
CPI-UNME
Weights
CPI-IW
CPI-AL
CPI-RL
Consumer Expenditure Survey
WPI
Wholesale
Transaction
s
Base Year
1984-85
2001
1986-87
1986-87
1993-94
No Items
146-365
120-360
260
260
435
Centres
59
78
600
600
1918
Time Lag
6W
1M
3W
3W
2W
M
M
M
M
W
Frequency
ECONOMIC DIVISION
Sectoral weights
Comparative weights of major groups for various price indices
Consumer Price Index for
Wholesale Price Index (WPI)
Industrial workers
Base: 1993-94=100
Consumer Price Index for
Agricultural/ Rural Labourers
Consumer Price Index for
Urban Non Manual
employees
Base: 2001=100
Item/Group
Weight
Food articles +
food products
26.94
Food
Fuel, Power, Light
& Lubricants
14.22
Fuel & Light
6.43
Fuel & Light
8.35
7.90 Fuel & Light
Beverages,
Tobacco &
Tobacco Products
Textiles
1.34
Pan, supari,
tobacco &
intoxicants
Clothing, bedding
& footwear
2.27
Pan, supari,
tobacco &
intoxicants
Clothing, bedding
& footwear
3.79
3.70 Pan, supari etc.
included in food
group
9.76 Clothing, bedding
& footwear
Leather & Leather
Products
Others
Total
1.02
Miscellaneous
23.26 Miscellaneous
11.73
15.27 Housing
100.00 Total
Housing
100.00 100.00 Total
9.80
Item/Group
Base: 1986-87=100
Base: 1984-85=100
Weight
Weight
Item/Group
Item/Group
Weight
AL
RL
46.20 Food
69.15 66.77 Food, beverages 47.13
& tobacco
46.68 Housing
100.00 Total
6.57
6.98
11.87 Miscellaneous
5.48
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7.03
23.95
16.41
100.00
Price Indices- Wholesale Prices
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Wholesale Price Index
Computed since 1944
Basket of Commodities
Weighting Diagram
Collection of price quotes
Release of information
Consumer Price Indices
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Family Living Survey
Selection of Commodities
Selection of Centres
Weights
Compilation
Other indices of similar varieties
Price Rise- Impact
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Consumers
Producers
Interest Rate
Exchange Rate
Trade- Domestic & International
Alternate ways of measuring inflation
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Year on year- conventional approach
52-weeks average
Build up during the fiscal year
Weekly/monthly build up
Deseasonalised annualized inflation
Alternate ways of inflation- results
2006-07
2007-08
2008-09
Year on year
5.35
3.11
10.72
52- week average
4.61
5.12
8.45
Fiscal year build up
5.88
2.38
5.21
Movement of Index & Inflation- All
Commodities
Movement of Index & InflationPrimary Commodities
Movement of Index & Inflation- Fuel &
Power
Movement of Index & InflationManufactured Products
Movement of Index – WPI & CPIs
GDP Deflator (per cent)
2004-05 2005-06 2006-07
2008-09
2007-08 (Q1)
GDP FC
Private
Consumption
Govt
Consumption
5.5
4.1
5.6
4.2
7.8
2.9
2.8
5.1
4.2
8.7
6.2
4.7
7.8
4.6
8.9
GFCF
9.6
5.6
5.5
4.3
8.3
GDP MP
5.6
4.1
5.6
4.3
7.6
ECONOMIC DIVISION
Inflation- update
WPI
CPI-IW
CPI-UNME CPI-AL
CPI-RL
2005-06
4.4
4.4
4.7
3.9
3.9
2006-07
5.4
6.7
6.6
7.8
7.5
2007-08
MAR
4.6
7.48
6.2
7.87
5.9
6.02
7.5
7.91
7.2
7.63
APR
8.04
7.81
6.99
8.88
8.61
MAY
8.86
7.75
6.76
9.11
8.84
JUN
11.82
7.69
7.31
8.77
8.75
JUL
12.36
8.33
7.39
9.41
9.41
AUG
12.49
9.02
8.54
10.29
10.29
SEP
12.04
9.77
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10.98
10.98
ECONOMIC DIVISION
Major contributors to inflation
Weight
Oct 18, 2008
Oct 20, 2007
Inflation
WC
Inflation
WC
22.0
10.92
23.46
5.11
36.93
Food Articles
15.4
8.43
12.66
3.27
16.82
Non-Food Articles
6.1
10.81
6.03
11.46
20.30
Minerals
0.5
52.48
4.70
-0.52
-0.16
Fuel & Power
14.2
14.09
28.21
-1.52
-10.94
Minerals Oils
7.0
21.71
25.53
-1.58
-6.67
63.7
9.26
48.23
4.21
74.54
Food Products
11.5
7.98
7.57
3.27
10.65
Chemical Products
11.9
9.62
10.22
5.79
20.56
Non-Metallic Min. Products
2.5
3.56
0.82
10.20
7.55
Basic Metals & Products
8.3
19.83
17.81
4.21
12.83
Machinery & Machine Tools
8.4
5.25
3.20
7.10
14.28
Primary Articles
Manufacture Products
ECONOMIC DIVISION
Jun/04
Oct/08
Aug/08
Jun/08
Apr/08
Feb/08
Dec/07
Oct/07
Aug/07
Jun/07
Apr/07
Feb/07
Dec/06
Oct/06
Aug/06
Jun/06
Apr/06
Feb/06
Dec/05
Oct/05
Aug/05
Jun/05
Apr/05
Feb/05
Dec/04
Oct/04
Aug/04
230
Apr/04
Feb/04
Dec/03
Oct/03
Aug/03
Jun/03
Apr/03
WPI- Index and Inflation trend
250
3.5
210
Index
3.0
Monthly change
2.5
Poly. (Index)
2.0
Linear (Monthly change)
1.5
190
1.0
0.5
170
0.0
-0.5
150
-1.0
Deseasonalised index/inflation build up
2007-08
SF
2008-09
Index
IndexR
Build
up Inf.
Annu.
Inf
Apr
May
Jun
Jul
Aug
Sep
99.7
99.9
100.1
100.2
100.3
100.9
211.5
212.3
212.3
213.6
213.8
215.1
212.1
212.5
212.1
213.2
213.2
213.2
0.3
0.2
-0.2
0.5
0.0
0.0
3.7
2.1
-2.4
6.3
-0.1
0.1
Oct
100.7
215.2
213.7
0.2
3.0
Nov
100.6
215.9
214.6
0.4
5.2
Dec
99.8
216.4
216.8
1.0
13.2
Jan
99.4
218.2
219.5
1.2
15.9
Feb
99.1
219.9
221.9
1.1
13.8
Mar
99.1
225.5
227.5
2.5
35.2
Index
Index
R
Build
up inf.
Annu.
Inf.
228.5
231.1
237.4
240.0
240.5
241.0
229.2
231.3
237.2
239.5
239.8
238.9
0.7
0.9
2.5
1.0
0.1
-0.4
9.0
11.8
34.8
12.6
1.3
-4.6
THANK
YOU
ECONOMIC DIVISION