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| Inflation down to 8.4% |
| BS Reporter / New Delhi Dec 05, 2008, 00:48 IST |
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The inflation rate, as measured by wholesale price index (WPI), fell to a six-month low of 8.4 per cent for the week ended November 22 this year, as compared with 8.84 per cent in the previous week. It stood at 3.11 per cent in the corresponding week last year.
A sharp fall in prices of fuel products, which has a weight of around 14 per cent in WPI, contributed for decline in the inflation rate. However, the rate of price increase in the other two commodity groups increased on a week-on-week basis.
Annual rate of inflation for ‘food article’ increased by 50 basis points (one basis point is one-hundredth of a percentage point) to 10.43 per cent in the week ended November 22, 2008, as against 9.93 per cent in the previous week.
“Primary articles witness fluctuations in prices. These would come down in the next few weeks,” said D K Joshi, an economist with Crisil Ltd, a ratings and advisory firm.
Unlike WPI, the consumer price index (CPI) numbers are released with a time-lag of one month and the latest CPI figures show rise in the inflation rate especially with relation to food articles.
The annual rate of inflation of CPI for industrial workers, for the month of October 2008, touched the double-digit mark of 10.45 per cent for the first time in 10 years.
Primary articles, which include food, non-food and minerals, contributed 32.62 per cent to the inflation for the week ended November 22, which is 10 percentage points higher than their contribution to WPI-basket, said a statement from the finance ministry.
Despite the increase in prices at consumer-level, economists predict a downward-trend for WPI-based inflation. The Reserve Bank of Bank (RBI) also has reversed its policy direction by reducing key interest rates, thereby signaling its concerns about boosting growth.
Industry lobby groups are calling for further reduction in interest rate to boost consumer demand in key interest-sensitive sectors like housing and automobile sectors.
The final inflation number for the week ended September 29 has been revised upwards by 28 bps to 12.08 per cent, as compared with to provisional estimate of 11.8 per cent.
For the week ended November 22 this year, inflation for fuel group declined to 5.28 per cent as compared with 7.81 per cent in the previous week. However, inflation for primary articles and manufactured products increased to 11.98 per cent (11.9 per cent) and 8.15 per cent (8.01 per cent). Figures in bracket refer to previous week numbers.
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