Inflation accelerates to 12.01%

The wholesale price index (WPI)-based provisional rate of inflation rose to 12.01 per cent for the week ended July 26, spiralling to a new 13-year high, marginally higher than 11.98 per cent in the previous week.

In the corresponding week last July, inflation stood at 4.70 per cent.

Meanwhile, the final rate of inflation for the week ended May 31 has been revised upwards to 9.32 per cent, over the provisional 8.75 per cent reported earlier.

Economists say inflation seems to have lost some momentum with a correction in some commodity prices. However, the base effect is expected to have a negative impact and push up the rate between now and October.

The latest figure was expected, as prices of several commodities including sugar and cotton have risen. And, as in the past, the spurt was also driven by delayed revisions to the index for items like woollen textiles, which saw a 5 per cent increase in the index after six weeks, among other items.

As of July 22, wholesale prices of 16 select essential commodities, which the central government monitors on a daily basis, reveal that prices of tur dal rose Rs 105 per quintal, moong by Rs 60 per quintal, urad Rs 25 per quintal and sugar by Rs 30 per quintal. Prices of potatoes declined Rs 87 per quintal over the previous week.

Today’s data prompted the finance ministry to say that inflation, on a week-on-week basis, has continued to remain stable. The WPI moved up from 239.3 in the week ending July 19 to 239.6 in the following week.

In the ‘primary articles’ group, the annual point-to-point inflation increased to 10.32 per cent, compared with 10.24 per cent reported last week, but lower than 10.84 per cent reported for the week ending June 28. The finance ministry said inflation at its current level was lower than its level of 10.47 per cent, a year back.

Out of a total of 98 articles, 18 have shown a decline in prices, including arhar, gram, barley, wheat, rice, cardamoms and iron ore, than that for the week ended July 19. However, prices of 18 articles (out of a total of 19) in the ‘fuel and power’ group have not shown any increase.

In the case of ‘manufactured products’, out of a total 318 commodities, 299 have shown no increase in prices over the last week. But there was a price decline in four commodities — cottonseed oil, groundnut oil, resins and acids.

Only 15 products, particularly the cotton and woollen yarn, woollen cloth, groundnut cake, white printing paper, ball bearings, cement, newsprint and sugar witnessed an increase in prices.

The annual inflation rate for the group of 30 essential commodities at 6.66 per cent was marginally lower than the inflation of 6.67 per cent recorded in previous week.

Annual inflation of these commodities has continued to be range-bound between 5.7 and 6.7 per cent in 17 weeks of the current fiscal year.

Increase in prices of essential commodities including foodgrain, pulses, edible oils, vegetables, dairy products and some other commodities including kerosene, soap and safety matches have stabilised.