CMIE projects inflation at 0.1% this fiscal on higher base effect
The Financial Express, May 21, 2009, Page 2
Press Trust of India, Mumbai
The average inflation during 2009-10 is projected to remain negligible at just 0.1% as against 8.3% in 2008-09, Centre for Monitoring Indian Economy (CMIE) has said.
The wholesale price index for the week ended April 18 was 0.26% and it is expected to hover around this level in most months of fiscal 2009-10, CMIE said in its monthly review.
During the year, prices of fuel products and manufactured goods are expected to see a fall while inflation in primary articles will remain firm, it said. The RBI has projected lower money supply growth during FY 2010. Capacity expansion is expected to continue during FY 2010. All these factors are expected to keep downward pressure on inflation in 2009-10.
In addition to these factors, a higher base will also play a role in bringing down inflation in 2009-10, CMIE said.
Prices of fuel and electricity as a group are projected to see a decline of six% as against 7.4% rise in FY'09. Electricity prices are expected to rise during the year but a decline in petroleum product prices will more than compensate for the rise in electricity prices. WPI of manufactured goods is projected to fall 0.5% during FY 2010. This will be the first decline after 1955-56 when WPI of manufactured goods had fallen 5.1%, CMIE said in its review.
WPI of manufactured goods had fallen by 5.1%. In recent years, the lowest inflation in manufactured goods was 1.8% that was recorded in 2001-02, it added.
Among the manufactured goods, wholesale prices of textiles, rubber and plastic products, chemicals and basic metals and metal products will see a decline in the range of 1.0-10.5%, the think-tank said.
Prices of textile products are projected to see a fall of 1% while prices of the basic metals group will dip by 10.5%.
Prices of food articles have not been affected by the global liquidity crisis as much as the prices of other product groups. The year-on-year rise in foodgrain prices remained above 10% every month since November 2008.
Prices of foodgrain are projected to remain firm in FY10 too.
CMIE pointed out that the WPI of primary articles is projected to see a six% rise in FY 10. This group will be solely responsible for overall positive inflation, albeit negligible at 0.1% in FY 10.
The Financial Express, May 21, 2009, Page 2
Press Trust of India, Mumbai
The average inflation during 2009-10 is projected to remain negligible at just 0.1% as against 8.3% in 2008-09, Centre for Monitoring Indian Economy (CMIE) has said.
The wholesale price index for the week ended April 18 was 0.26% and it is expected to hover around this level in most months of fiscal 2009-10, CMIE said in its monthly review.
During the year, prices of fuel products and manufactured goods are expected to see a fall while inflation in primary articles will remain firm, it said. The RBI has projected lower money supply growth during FY 2010. Capacity expansion is expected to continue during FY 2010. All these factors are expected to keep downward pressure on inflation in 2009-10.
In addition to these factors, a higher base will also play a role in bringing down inflation in 2009-10, CMIE said.
Prices of fuel and electricity as a group are projected to see a decline of six% as against 7.4% rise in FY'09. Electricity prices are expected to rise during the year but a decline in petroleum product prices will more than compensate for the rise in electricity prices. WPI of manufactured goods is projected to fall 0.5% during FY 2010. This will be the first decline after 1955-56 when WPI of manufactured goods had fallen 5.1%, CMIE said in its review.
WPI of manufactured goods had fallen by 5.1%. In recent years, the lowest inflation in manufactured goods was 1.8% that was recorded in 2001-02, it added.
Among the manufactured goods, wholesale prices of textiles, rubber and plastic products, chemicals and basic metals and metal products will see a decline in the range of 1.0-10.5%, the think-tank said.
Prices of textile products are projected to see a fall of 1% while prices of the basic metals group will dip by 10.5%.
Prices of food articles have not been affected by the global liquidity crisis as much as the prices of other product groups. The year-on-year rise in foodgrain prices remained above 10% every month since November 2008.
Prices of foodgrain are projected to remain firm in FY10 too.
CMIE pointed out that the WPI of primary articles is projected to see a six% rise in FY 10. This group will be solely responsible for overall positive inflation, albeit negligible at 0.1% in FY 10.
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