DETERMINANT

S OF
INFLATION

BY : GROUP 1
ANAMIKA BHARTI
ANISHA BIHANI
ALANKAR CHAKRABARTI
BIMAL KUMAR SINGH
MANISHA BARTHAKUR
NIRVEE SARAF
ROHIT RICHARD
VINEETA KEDIA
INFLATION

Persistent rise in the

price levels of
commodities and
services, leading to a
fall in the currency’s
purchasing power
INFLATION IN INDIA

Between 1950-1960
The inflation on an average
was at 2.00%

Between 1960-1970
The inflation on an average
was at 7.2%

Between 1970-1980
The inflation on an average
was at 8.5%.
TRENDS OF INFLATION IN INDIA

Year Inflation Rate

2000 6.7
2001 5.4
2002 5.4
2003 5.4
2004 3.8
2005 4.2
2006 4.2
2007 5.3
2008 6.4
2009 8.3
DETERMINANTS OF INFLATION
GDP

POPULATION

FOOD PRICE

UNEMPLOYMENT

CRUDE OIL

EXPORT

IMPORT

FISCAL DEFICIT
CORRELATION & REGRESSION
Correlation is a measure of the relation between two or more variables.
Correlation coefficients can range from -1.00 to +1.00.

Regression is a statistical measure that attempts to determine the strength of

the relationship between one dependent variable (usually denoted by Y) and a
series of other changing variables (known as independent variables).
 INFLATION vs. GDP
GDP Rate(Real
Year Inflation Rate
Growth Rate)
2000 5.5 6.7
2001 6 5.4
2002 4.3 5.4
2003 4.3 5.4
2004 8.3 3.8
2005 6.2 4.2
2006 8.4 4.2
2007 9.2 5.3
2008 9 6.4
2009 7.4 8.3
 Inflation vs. GDP
9
8
7
6
f(x) = − 0.05 x + 5.88
5 R² = 0.01
Inflation

4
3
2
1
0
4 5 6 7 8 9 10
Gross Domestic Product
 INFLATION vs. POPULATION
YEAR POPULATION POPULATION (%) INFLATION

2000 1,015,923,000 6.7

9.3498
2001 1,032,473,426 5.4
9.5021
2002 1,048,640,721 5.4
9.6509
2003 1,064,398,612 5.4
9.7959
2004 1,079,721,194 3.8
9.937
2005 1,094,583,000 4.2
10.0737
2006 1,109,811,417 4.2
10.2139
2007 1,124,786,997 5.3
10.3517
2008 1,139,964,932 6.4
10.4914
2009 1,155,347,678 8.3
10.633
INFLATION vs. POPULATION
9

6
f(x) = 0.73 x − 1.75
INFLATION

Linear ()
4 Linear ()

0
9.2 9.4 9.6 9.8 10 10.2 10.4 10.6 10.8

POPULATION IN PERCENTAGE
INFLATION vs. FOOD PRICES
MONTH FOOD PRICE(RICE) INFLATION
Jan-10 598 16.81
Feb-10 584.75 17.97
Mar-10 540.13 16.22
Apr-10 502.23 17.65
May-10 472.48 16.44
Jun-10 458.55 16.9
Jul-10 470.68 12.63
Aug-10 486.86 12.81
Sep-10 519.95 10.05
Oct-10 533.13 12.31
Nov-10 543.14 8.6
Dec-10 536.78 18.82
Jan-11 527.5 15.57
 INFLATION vs. FOOD PRICES
20
18
16
14 f(x) = 0.01 x + 9.93
12
10
Inflation

8
6
4
2
0
440 460 480 500 520 540 560 580 600 620

Food Prices
INFLATION vs. UNEMPLOYMENT
Year Unemployment Inflation Rate
2000 7 6.7
2001 8.8 5.4
2002 8.8 5.4
2003 8.8 5.4
2004 9.5 3.8
2005 9.2 4.2
2006 8.9 4.2
2007 7.8 5.3
2008 7.2 6.4
2009 6.8 8.3
 Inflation vs. Unemployment
9

7 f(x) = − 1.23 x + 15.71

6

5
Inflation

0
6.5 7 7.5 8 8.5 9 9.5 10
Unemployment
INFLATION vs. CRUDE OIL PRICES
YEAR CRUDE OIL(RS, LITRE) INFLATION
2000 24.40 6.7
2001 27 5.4
2002 29.94 5.4
2003 30.30 5.4
2004 32.36 3.8
2005 41 4.2
2006 60.54 4.2
2007 52.62 5.3
2008 89.52 6.4
2009 44 8.3
INFLATION vs. CRUDE OIL PRICES
9

6
INFLATION
f(x) = 0.01 x + 5.24
5
Linear ()
4 Linear ()

0
20 30 40 50 60 70 80 90 100

CRUDE OIL PRICES

 INFLATION vs. EXPORT
YEAR EXPORTS(US-BLN$) INFLATION
2000 16 6.7
2001 16.8 5.4
2002 19.1 5.4
2003 23.1 5.4
2004 38.5 3.8
2005 68 4.2
2006 73 4.2
2007 86 5.3
2008 106 6.4
2009 111 8.3
 INFLATION vs. EXPORT
9

6 f(x) = 0.01 x + 4.86

R² = 0.1

5
Inflation

0
0 20 40 60 80 100 120
Export
 INFLATION vs. IMPORT
YEAR IMPORTS(US-BLN$) INFLATION
2000 18.9 6.7
2001 19.8 5.4
2002 20.8 5.4
2003 25.5 5.4
2004 38.4 3.8
2005 67 4.2
2006 70 4.2
2007 81 5.3
2008 91 6.4
2009 94 8.3
 INFLATION vs. IMPORT
9

6
f(x) = 0.01 x + 4.92
R² = 0.07
5
Inflation

0
10 20 30 40 50 60 70 80 90 100
Import
INFLATION vs. FISCAL DEFICIT
YEAR INFLATION(X) FISCAL DEFICIT(Y)

2000 6.7 5.1

2001 5.4 5.7
2002 5.4 5.3
2003 5.4 5
2004 3.8 4.0
2005 4.2 4.0
2006 4.2 4.1
2007 5.3 3.5
2008 6.4 2.8
2009 8.3 6.1
 INFLATION vs. FISCAL DEFICIT
9

6 f(x) = 0.58 x + 2.88

INFLATION

4 Linear ()

0
2.5 3 3.5 4 4.5 5 5.5 6 6.5
FISCAL DEFICIT