Inflation moderates to 6.61%

Inflation, as measured by wholesale price index (WPI), hit a nine-month low of 6.61% for the week ended December 13 this year, because of drop in prices of crude and manufactured products.

Compared to last week, the headline inflation declined by 23 basis points (one basis point is one-hundredth of a percentage point). However, inflation was much lower at 3.84% in the corresponding week year-ago. Prices of manufactured goods could have fallen in response to across-the-board cut in excise duty by 4 percentage points announced by the government, as part of its first fiscal stimulus package.   

However, inflation for ‘primary articles’—which has a weight of 22% in the index and contains food articles—increased by 34 basis points to 12.15% in the reported week, as compared to 11.81% the previous week ended December 6, 2008.

Annual rate of inflation for ‘food articles’ increased by 27 basis points to 10.46% in the week ended December 13. It was 2.33% in the corresponding week year ago.

The final inflation number for the week ended October 18 this year was revised upwards by 14 basis points to 10.82% as against provisional estimate of 10.68%. The final numbers are released two months after the provisional estimate is made public.