Inflation stable at 11.9%???

I can understand some layman making such a statement, but not a leading business newspaper. The headline of this respected newspaper says:

Inflation seen moderating over previous week level at just below 11.9 per cent, versus last week’s 11.91 per cent .

How can you say inflation at 11.9% as stable or moderate?? It is still more than double Indian economy’s comfort zone – 5% – 5.5% . I actually noticed such news items last week as well where instead of the expected 12% plus, it came to 11.91%. It is important that the media covers events properly and uses appropriate words.

I also noted that before Q4 2007-08 GDP figures were released, media said  growth will slowdown and be around 8% – 8.5% (It was finally noted at 9%). I mean how can you say 8%-8.5% is slowdown? Even now the same thing continues.

PS. I have also been noticing that the same newspaper gets the inflation figures before the official statement is released. Y’day also it reported inflation seen at 11.9% and it came at 11.89%. I am wondering what is going on here.

The inflation has always been released on Friday and recently govt changed it to Thursday evening. I don’t know the exact reason but may be it was because of the leaks. I am not seeing it has stopped even with the Thursday move. I do not understand all this media hype over weekly inflation numbers. It will be best to make it a monthly figure.

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3 Responses to “Inflation stable at 11.9%???”

  1. neeraj Says:

    Its the same case on TV.

    e.g.

    On CNBC TV 18, if two previous weeks had figures of 11% and 11.5% and new figure comes as 11.9%, it is interpreted as a moderating of rate of increase of inflation and thus a good thing.

    I am surprised that even knowledgeable presenters like Latha Venkatesh use such interpretations.

    How can they forget that inflation itself is a the rate of change of prices. If the number increase, the prices are going up at a faster rate.

    Using rate of change of inflation (which is the second derivative of prices) is futile.

  2. Amol Agrawal Says:

    Yeah, even I saw that discussion on CNBC after the inflation release. This entire hype over inflation numbers is just getting too much.

  3. RBI tightens rates at Q1 2008-09 review of Monetary Policy « Mostly Economics Says:

    […] rates given the above three reasons. Inflation at 11.89% is anything but a decline (more on this here), IIP numbers need to be revised, and crude oil prices are extremely volatile and it is too early […]

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