Break-even value of PMI is not 50 but 44, RBI working paper suggests
The break-even value of Purchasing Managers Indexes (PMIs), signalling neither expansion nor contraction, is around 44 – significantly less than the commonly referred value of 50, implying that when PMIs exceed 44, seasonally adjusted annualised month-on-month Wholesale Price Index (WPI) inflation turns positive, according to a recent Reserve Bank of India (RBI) working paper.
An Empirical Analysis of the Relationship between WPI and PMI-Manufacturing Price Indices in India by Shri Jeevan Kumar
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