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Inflation rate rises to 0.26%

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The headline rate marginally rose to 0.26 per cent for the week ended April 11 this year, mainly because of the rise in prices of manufactured products.

The inflation rate, as measured by the wholesale price index (WPI), was 0.18 per cent last week and 7.95 per cent in the corresponding week in 2008.

Though the inflation rate showed an upward move, experts continue to believe that the inflation rate would go down in the negative territory (below zero) in 1-2 weeks.

Higher prices of primary articles are cited as one of the reasons for the inflation rate still ruling above zero per cent. This category rose by 0.5 per cent on a week-on-week basis, but on an annual basis the rate came down by 10 basis points to 4.36 per cent because of “base effect”.

“It is inevitable that the will go into the negative territory, but it will happen because of base effect and will not be a deflationary situation,” said Indranil Pan, chief economist with Mumbai-based Kotak Mahindra Bank.

Items consumed by the common man like cereals continue to remain high, at around 10 per cent. “Though the inflation rate may look low, prices of essential commodities continue to be on the rise,” said DK Joshi, an economist with Crisil India, a ratings and research agency.

The inflation rate of pulses, another essential commodity, showed a decrease of around 1 percentage point from the previous week’s figure to 8.6 per cent.

The inflation rate of sugar continues to be around 18 per cent. Fuel prices did not show any change in the index.

The rate of inflation for manufactured products stood at 0.9 per cent, against 0.75 per cent in the previous week.

The final rate of inflation for the week ended February 14, 2009, was revised downwards to 3.18 per cent, against an earlier provisional estimate of 3.36 per cent.


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