Analyzing September 2024 Inflation: Signs of Easing Price Pressures Amid Base Effects
By Asif Khan, CFA
Chairman
EDGE AMC Limited
Posted on: 03 Oct, 2024
BBS reported September 2024 inflation yesterday.
CPI: YoY +9.91%/MoM +0.98%
Food: YoY +10.40%/MoM +1.11%
Non-Food: YoY +9.49%/ MoM +0.87%
BBS data suggests that inflation has declined YoY compared to August (+10.49%). However, this is due to base effects as we see MoM increase is still high at +0.98% (which annualized is over 12%).
We can match this number with our estimate of food inflation. Our Egg Khichuri index also printed exactly 10.4% YoY (a coincidence as the baskets differ). However, if we include Chicken which is a high-value item our index falls significantly (Chicken Khichuri Index at +4.5% YoY).
What is more important is that inflationary pressures appear to be coming down. This can be confirmed in two ways. Firstly, the chart showing 3mma yoy % change in khichuri price is trending downwards. Secondly, we can look at selected commodity prices and check their trend also.
Remember, inflation is a % increase in price. If prices went up a lot and remained unchanged that means inflation has declined substantially. Prices falling is deflation.
- Tags:
- Inflation, Price, Food Inflation, Egg Khichuri Index, Chicken Khichuri Index
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