Some Inflation Figures

Here are some inflation figures from the report ‘Higher inflation cost households Rs 5.8 trillion’from CRISIL.They can be plugged into the calculator here: https://wealthymatters.com/2011/01/22/inflation-calculator/

Hope this helps with your financial planning.

‘The study shows that growth of private consumption expenditure in nominal terms  increased to nearly 17 per cent per year during this period from 14 per cent in  the preceding 3 years mainly due to the rise in food inflation.’

‘The rise in inflation to 8 per cent per year during 2008-09 to 2010-11 from 5  per cent in the preceding 3 years
  eroded the purchasing power of money and  inflated the consumption expenditure bill of Indian households by Rs. 5.8 trillion.'(NB the last 3 years inflation figures are not programmed into the calculator we are using,so these could be plugged in to work out our estimates)

‘The inflation was, however, not uniform, and food items saw a much sharper price increase as compared to non-food items.Food inflation was at 11.6 per cent  during 2008-09 to 2010-11 as compared to non-food inflation of 5.7 per cent.   Within the non-food category,prices of many items declined. For instance, in  2010-11, out of a total WPI basket of 676 items, prices of 146 items in the  wholesale price index fell during the year. Prices of another 214 commodities  witnessed only a moderate price rise of less than 4 per cent. The fall in prices  was more evident in the durables category (television sets, washing machines,  conditioners etc).’–(NB:So we need to project our consumption and then work out our personal inflation,the result can be pretty shocking)

‘Contrary to general perception, prices of several commodities do decline even  during periods of high inflation. Prices of many consumer durables have declined  in the last few years. If adjusted for improvement in quality of goods, the decline would be  even sharper. Consumers immediately feel the impact of rising inflation in food  articles because these items are purchased on a daily basis. Durables are not purchased frequently, and hence, a fall in their prices tends to be overlooked  while forming inflation expectations.’

The middle and high income groups benefit more from falling prices of non-food  manufactured items particularly durable goods, as they have higher disposable  income to spend on other goods and services including consumer durables and for  savings. The poor, with limited discretionary income to spend on consumer durables, do not benefit much from their lower prices. In contrast, rising prices of food  items strain their discretionary spending.