Inflation rate stays in negative for the second week

Inflation rate stays in negative for the second week
The Hindu Business Line, June 26, 2009, Page 7

Wholesale Price Index for all commodities at 234.2.

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The inflation declined marginally by 1.14 per cent during the week ended June 13.
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Our Bureau, New Delhi

Wholesale price inflation continued in the negative for a second straight week. The annual WPI-based inflation declined by 1.14 per cent during the week ended June 13, easing marginally from the minus 1.61 per cent recorded in the previous week, according to a data released by the Ministry of Commerce and Industry here on Thursday.

Year-on-year inflation was recorded at 11.80 per cent during the corresponding week of the previous year.

The whole sale price index was 234.2 points for the week ended June 13 from 236.9 in the same week a year ago.

On a disaggregated basis, the Primary Articles group recorded a marginal decline in inflation during the latest reported week to 5.7 per cent from 5.8 per cent in the previous week.

Food items

In food articles, inflation fell to 8.65 per cent from 8.71 per cent in the week ended June 6, 2009 due to fall in inflation in cereals.

In non-food articles, inflation deepened to (-) 1.3 per cent from (-) 0.9 per cent in the earlier week. In the ‘minerals’ subgroup, inflation remained unchanged at 4.2 per cent for the third consecutive week.

In the fuel and power index, inflation eased fractionally from (-) 12.8 per cent in the week of June 6 to (-) 12.6 per cent in the current week.

Manufactured products

In manufactured products, inflation during the week ended June 13 accelerated by almost 80 basis points to 0.8 per cent, from 0 per cent in the previous week.

The increase is on account of textiles (cotton textiles), rubber and plastic products (tubes), chemicals and chemical products (drugs and medicines), and transport equipment and parts

Inflation in the food index, which has a cumulative weight of 25.43 per cent in the index, came down to 9.2 per cent from 9.4 per cent in the week ended June 6, 2009.

Inflation ruled higher in the sub-groups of pulses, eggs, meat and fish, condiments and spices in primary food articles, while the sub-group of sugar, khandsari and gur in manufactured food products continues to record rising double digit levels. However, inflation in edible oils has been negative since the beginning of 2009-10.

Falling wholesale prices are only a statistical feature and do not mean India is suffering from deflation, the RBI Governor, Mr D. Subbarao, said June 20.

For the week ended April 18, the final WPI for ‘All Commodities’ stood at 232.6 points as compared to the provisional estimate of 230.2 points and the annual rate of inflation based on final index, calculated on point to point basis, stood at 1.62 per cent as compared to the earlier estimate of 0.57 per cent.