The following is the statement of Department of Economic Affairs, Ministry of Finance on inflation issued here today:
Annual (year-on-year) rate of inflation declined by 68 basis points from 5.1 per cent in the week ended January 24, 2009 to 4.4 per cent for the week ended January 31, 2009, the lowest in over a year, since January 12, 2008. Inflation has finally fallen below 5 per cent.
Year-on-year Inflation by Commodity groups
Commodity group-wise examination shows that the decrease in overall inflation in the current week has resulted from the reduction in prices of petro products on 28th January 2009. Examining the inflation rates by groups, it is observed that:
i. In ‘primary articles’, inflation increased to 9.1 per cent in the week under reference, against 9.0 per cent in the previous week. In ‘food articles’, inflation at 11.5 per cent in the current week and 11.1 per cent last week still persists in double digits. In ‘non-food articles’, inflation fell to 5.2 per cent compared to 5.7 per cent in the previous week. In ‘minerals’, inflation continued to fall further to (-) 0.8 per cent versus (-) 0.6 per cent last week.
ii. In ‘fuel and power’, inflation fell to (-) 3.5 per cent, vis-à-vis (-) 0.8 per cent last week, the decline being on account of administered oils, where inflation decelerated by 710 basis points from the previous week.
iii. In ‘manufactured products’, inflation rate decreased to 5.5 per cent in the current week, from 5.7 per cent last week. Within this commodity group,
a) The textiles sub-group has recorded a decline in inflation to single digits, after having been in double digits for over 2 months, but cotton textiles and yarn, jute, hemp and mesta textiles continue to post inflation rates of over 15 per cent.
b) Inflation in food products decreased compared to last week, but sugar, khandsari & gur, salt
and oil cakes within food products record rates above 15 per cent.
Year-on-year inflation in the combined food index
Inflation in the food index (wt = 25.43 per cent) for the week ended January 31, 2009 was higher at 9.4 per cent compared to 9.2 per cent last week, due to increase in:
(a) sugar, khandsari & gur from 14.5 per cent last week to 15.8 per cent;
(b) cereals from 10.5 per cent last week to 11.7 per cent;
(c ) pulses from 13.3 per cent in the previous week to 15 per cent; and
(d) fruits & vegetables from 18.5 per cent to 20.4 per cent in the week under reference.
Deseasonalised monthly WPI annualized inflation
Trends in deseasonalised overall inflation indicate slowdown of the rate of decline, though it still remains negative. The negative trend which began in September 2008 accelerated from (-) 3.2 per cent to (-) 19.7 per cent in November and then decelerated to (-) 11.7 per cent in December 2008 and further to (-) 1.8 per cent in January 2009. There has been a large drop in inflation in primary articles from 8.6 per cent in December 2008 to 1.5 per cent in January 2009, caused by a sharp decline in non-food articles to (-) 24.3 per cent from the previous level of 3 per cent in December 2008. A similar pattern of decline is observed in inflation in manufactured products, which declined from (-) 12.6 per cent in November 2008 to (-) 3.5 per cent in January 2009.
Annual (year-on-year) rate of inflation declined by 68 basis points from 5.1 per cent in the week ended January 24, 2009 to 4.4 per cent for the week ended January 31, 2009, the lowest in over a year, since January 12, 2008. Inflation has finally fallen below 5 per cent.
Year-on-year Inflation by Commodity groups
Commodity group-wise examination shows that the decrease in overall inflation in the current week has resulted from the reduction in prices of petro products on 28th January 2009. Examining the inflation rates by groups, it is observed that:
i. In ‘primary articles’, inflation increased to 9.1 per cent in the week under reference, against 9.0 per cent in the previous week. In ‘food articles’, inflation at 11.5 per cent in the current week and 11.1 per cent last week still persists in double digits. In ‘non-food articles’, inflation fell to 5.2 per cent compared to 5.7 per cent in the previous week. In ‘minerals’, inflation continued to fall further to (-) 0.8 per cent versus (-) 0.6 per cent last week.
ii. In ‘fuel and power’, inflation fell to (-) 3.5 per cent, vis-à-vis (-) 0.8 per cent last week, the decline being on account of administered oils, where inflation decelerated by 710 basis points from the previous week.
iii. In ‘manufactured products’, inflation rate decreased to 5.5 per cent in the current week, from 5.7 per cent last week. Within this commodity group,
a) The textiles sub-group has recorded a decline in inflation to single digits, after having been in double digits for over 2 months, but cotton textiles and yarn, jute, hemp and mesta textiles continue to post inflation rates of over 15 per cent.
b) Inflation in food products decreased compared to last week, but sugar, khandsari & gur, salt
and oil cakes within food products record rates above 15 per cent.
Year-on-year inflation in the combined food index
Inflation in the food index (wt = 25.43 per cent) for the week ended January 31, 2009 was higher at 9.4 per cent compared to 9.2 per cent last week, due to increase in:
(a) sugar, khandsari & gur from 14.5 per cent last week to 15.8 per cent;
(b) cereals from 10.5 per cent last week to 11.7 per cent;
(c ) pulses from 13.3 per cent in the previous week to 15 per cent; and
(d) fruits & vegetables from 18.5 per cent to 20.4 per cent in the week under reference.
Deseasonalised monthly WPI annualized inflation
Trends in deseasonalised overall inflation indicate slowdown of the rate of decline, though it still remains negative. The negative trend which began in September 2008 accelerated from (-) 3.2 per cent to (-) 19.7 per cent in November and then decelerated to (-) 11.7 per cent in December 2008 and further to (-) 1.8 per cent in January 2009. There has been a large drop in inflation in primary articles from 8.6 per cent in December 2008 to 1.5 per cent in January 2009, caused by a sharp decline in non-food articles to (-) 24.3 per cent from the previous level of 3 per cent in December 2008. A similar pattern of decline is observed in inflation in manufactured products, which declined from (-) 12.6 per cent in November 2008 to (-) 3.5 per cent in January 2009.
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