Feb 2010 inflation preview
According to the latest data released by the Federal Bureau of Statistics, price pressures have exhibited a marginal decline in Feb ‘10 as compared to Jan ‘10. The leading weekly figures for SPI have fallen from its recent peak of 19.44%YoY in the week ending 24th Jan’10 to 16.47%YoY in the week ending 25th Feb’10. On a cumulative basis, Feb’10 SPI inflation has dropped to ~18%YoY from 18.3%YoY in Jan’10. Based on our CPI estimation methodology which is based on the empirical link between SPI and CPI, we forecast CPI inflation to decrease to 13.5%YoY in Feb’10 against 13.68%YoY in Jan’10. As a result, real interest rates as measured against CPI inflation will rise to -1% in Feb’10 from -1.2% in Jan’10.
AKD Research
March 4, 2010
