As this year comes to an end, a series of StatsGurus will look at how 2012 has treated India in a year of growth slowdown and galloping inflation. As Table 1 shows, consumer inflation is just refusing to moderate. Wholesale price inflation, on the other hand, has distinctly turned downwards in the recent past.
As Table 2 shows, the problem is increases in the price of primary articles; inflation in a primary-goods index has been in double digits through most of 2012. Manufacturing inflation, on the other hand, has been low, in the comfort zone – implying that inflation is unlikely to be “generalised”, as the RBI fears.
Input prices have continued to be high, as the primary-goods inflation number suggested. After a dip in the price of oil mid-year, it is back above $100 a barrel, just $2 a barrel or so less than it was in the beginning of 2012, as Table 3 shows. Meanwhile, in Table 4, it is clear that – although international iron ore prices varied widely over the year – in India, because of insulation from world trends and high scarcity all year, the price index for iron ore barely changed from its original, high level.
Meanwhile, the manufacturing freeze shows itself in Table 5 through a flat IIP that oscillates just above the zero mark till the very last number. The biggest problem is in capital goods, the output of which shrank calamitously this year.(Click here for tables)
Comparing Indian growth and inflation internationally is illustrative. As Table 6 shows, many other places saw a slowdown in growth between the last released quarter of 2012 and growth in the equivalent 2011 quarter. Both the Euro zone and China slowed more than India. It is in average inflation that India is a real international standout, as Table 7 shows.
