India inflation consistently tough to pin down

High inflation is a drag on economic growth in the world’s second most populous country and matters immensely to over 400 million people, or over a third of India’s total population, who struggle to earn enough to feed their families three meals a day.

The particularly volatile nature of inflation in India has confounded policymakers and small business owners and has left economists, who are often running complex statistical models based on a dearth of reliable data, with a poor forecasting record.

To be fair, predicting economic data can be pretty tough in a country where collecting and reporting national statistics is still in its infancy stage. Provisional numbers are often completely revised away.

The latest sharp revisions to historic gross domestic product data, which show that India’s economic performance during the aftermath of the global financial crisis was worse than previously thought, is just one recent example.

Economists have underestimated the pace of monthly wholesale inflation 17 times over the past two years, according to an analysis of Reuters polls.

Lehman plus 365 – and interactive

The anniversary of Lehman Brothers’ collapse on September 15 will doubtlessly bring with it vast numbers of stories about what it all meant. It was, after all, the largest bankruptcy in U.S. history, a marker for the near collapse of the financial system and the trigger for government to pump trillions of dollars into economies to stave off another Great Depression.

We at Reuters will be analysing the fallout, of course, in the traditional way. But we have also launched a special web documentary and interactive timeline to mark the event. Pictures, video, and text all combine — sometimes poignantly — to chart the year of upheaval since the momentous day. 

Quite inconceivable to the founders of Lehman some 158 years ago. But then again, so probably was the collapse.

from From

How has the credit crisis affected you?

The demise of Lehman Brothers a year ago sparked a collapse in financial market confidence and set of a series of reactions that have spread hardship into the four corners of the globe.

Reuters News has charted the key events and their impact in "Times of Crisis" -- a major new multimedia production on (See it here.)

We'd like to add the experiences of Reuters readers. So, if you or your family have been affected by the events of the past year then use the comments section below to share your story.

How good are economists at forecasting CPI?

Market economists are taking a pasting worldwide for not predicting the global financial crisis. But how good is the profession at more bread-and-butter tasks, such as forecasting economic data?


In Australia, Reuters surveys 15-25 economists ahead of each quarterly CPI figure. A check back over analyst forecasts for the past 17 years shows:

    the median forecast mostly gets the direction right, but tends to miss the highs and lows of the cycle the median forecast is pretty close about half the time but about a quarter of the time it’s well off the mark and of those — about 10 percent of the time — it’s not even close 

Forecasts matter because financial markets closely watch surveys of analyst expectations for major data, and the consensus forecast is priced into the market well before official figures are released. So any big swings in the exchange rate or bill prices on the day are usually due to whether the result matches expectations, rather than the figure itself.

Meyer: markets likely disappointed

Former Fed Governor Laurence H. Meyer says the Group of Seven will likely be forced to issue a stronger statement than the “plan of action” released Friday night.

“I think this will be a considerable disappointment to the markets that a more signficant and dramatic action isn’t announced at this point. And I would expect it won’t take too long for them to see that it is going to be necessary,” Meyer, now a vice chairman at Macroeconomic Advisers, tells Thomson Reuters Markets Washington Bureau Chief Corbett B. Daly.