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| WPI inflation to turn positive after October: RBI |
| Press Trust of India / Mumbai Aug 27, 2009, 19:45 IST |
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Inflation based on Wholesale Price Index, measured on the basis of a basket of select commodities and their price variation, is likely to turn positive after October this year, the Reserve Bank said in its Annual Report.
Since June, year-on-year WPI inflation has remained negative, primarily reflecting the high base effect of the previous year that resulted from significant increases in the prices of food and international commodities in the first-half of 2008-09.
"The base effect could be expected to fade gradually and then disappear by October 2009, after which the positive WPI inflation will become visible," the Reserve Bank said.
While WPI inflation has turned negative, other indicators of inflation based on consumer price index for June (point-to-point) continue to remain high.
"The significant divergent behaviour of the inflation is largely on account of the differences in the coverage of items and their weights in the WPI and CPI," the apex bank said.
At the disaggregated level, even within the WPI, inflation in food articles and essential commodities remain close to the inflation as per different indices of CPI.
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