Inflation rate stays negative; food still costly

Inflation rate stays negative; food still costly
The Hindu Business Line, July 10, 2009, Page 7

Wholesale Price of all commodities up at 234.7.

In ‘primary articles’, annual inflation declined to 4.8 per cent in the latest reported week from 5.4 per cent in the previous week, due to the decreased inflation in ‘non-food articles’ at (-) 3.8 per cent.

Our Bureau, New Delhi

Inflation continued in the negative for the fourth week in succession, even as consumers continue to bear the brunt of high inflation in food products.
Food inflation

The annual Wholesale Price Index-based inflation rate fell 1.55 per cent for the week ended June 27, compared with the previous week’s annual decline of 1.3 per cent.
Inflation in the food index, however, continued at 8.9 per cent for the second week in running, with double digit inflation seen in cereals, pulses, vegetables, tea, sugar, and common salt.

According to data released by Ministry of Commerce and Industry, the year-on-year rate of inflation continued negative for the fourth week in succession, ensuring that for the whole month of June 2009, inflation has been below zero.

During June 2008, inflation ranged from 11.7 – 12 per cent.

The official WPI for ‘All Commodities’ for the latest reported week rose by 0.04 per cent to 234.7 points from 234.6 points for the previous week.

Fuel and power

In ‘primary articles’, annual inflation declined to 4.8 per cent in the latest reported week from 5.4 per cent in the previous week, due to the decreased inflation in ‘non-food articles’ at (-) 3.8 per cent, from (-) 1.9 per cent in the earlier week.

Inflation in the other two sub-groups remained stable, recording 8.5 per cent in ‘food articles’ and 4.4 per cent in ‘minerals’.

In ‘fuel and power’, year-on-year inflation held steady at (-) 12.4 per cent in the current week. In ‘manufactured products’, inflation fell to 0.2 per cent in the current week, from 0.5 per cent in the week ended June 20, following lower or stable rates in most sub-groups, except non-metallic mineral products and machinery and machine tools, where negative inflation eased marginally.

In the face of the near zero inflation rate in the commodity group, items recording two digit inflation are malt liquor, jute, hemp and mesta textiles and pesticides.

For the week ended May 2, the final WPI for All Commodities stood at 233.9 points as compared to 231.6 points and annual rate of inflation based on final index, calculated on point to point basis, stood at 1.48 per cent as compared to 0.48 per cent.