Is the dip in WPI inflation good news? - Chart Of The Day 15 February 2013 - Equitymaster

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Is the dip in WPI inflation good news?
Feb 15, 2013

Over the last few years, inflation has been one of the biggest spokes in the wheel of India's growth story. As such, the recent inflation figures may provide some respite. As per data released, the wholesale price index-based inflation declined to 6.62% in January 2013. It must be noted that this is the lowest in the last 38 months. This may probably provide a cue to the Reserve Bank of India (RBI) to cut interest rates lower.

However, the dip in inflation rings an alarm on the growth front. The fall in inflation has been attributed to the decline in fuel prices and in the prices of manufactured products. A dip in product prices usually indicates dropping demand in the economy. This, in turn, would impact job creation and economic growth. The other worrying matter is that consumer price inflation still remains high, driven by food inflation. It stood at 10.8% in January 2013 against 10.56% in December 2012. This dichotomy of falling prices of industrial goods and rising prices of essential goods has put policymakers in a fix.

Data source: The Economic Times

This Chart Of The Day was published in The 5 Minute WrapUp - What you can learn from Buffett's Heinz buy?

Equitymaster requests your view! Post a comment on "Is the dip in WPI inflation good news?". Click here!


Our Most Popular Charts

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2019
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms