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Friday November 6, 04:20 PM
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Monthly WPI data better for markets - official
NEW DELHI (Reuters) – The government’s move to report wholesale price index (WPI) inflation data on a monthly instead of a weekly basis will remove a source of market volatility, the country's chief statistician said in an interview on Friday.
The first monthly WPI figure, for October, will be released on Nov 12, and it will be calculated on a re-based data series.
"There will be withdrawal symptoms, but on the whole I think it's healthier for the markets," Pronab Sen, chief statistician of India, told Reuters.
"At least one source of volatility will be taken away."
He said agricultural data for the July-September quarter had been late in arriving due to severe flooding in parts of the country, so it was hard to know how the fiscal second quarter GDP number would look.
Agriculture was also hurt by a summer drought in large parts of the country. Sen said agriculture output could have fallen during the quarter by between 2 and 6 percent, which may affect the overall GDP numbers by as much as a percentage point.
In the first quarter of the current fiscal year, India's economy grew an annual 6.1 percent.
Sen also said economic data, such as exports and industrial output, would show distortions in the December quarter after activity plummeted a year ago amid the global financial crisis.
"The next three months' figures are something that I will report, but I will take no call," said Sen.
The government is switching to the monthly release of wholesale inflation data from its current weekly format to capture the prices of manufactured goods more accurately and align with global practices.
"What had been happening for much too long now was that we were turning out these weekly estimates which we knew, the markets knew, everybody knew were not particularly reliable," Sen said from his office.
"The markets were reacting on a weekly basis, and we were actually introducing a source of volatility," he said.
The government is also changing the base year to 2004 from the present 1993/94 for calculating inflation.
(Reporting by Surojit Gupta, Paul de Bendern and Tony Munroe; Editing by John Mair)
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