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INDIA BUSINESS WORLD - 1st March - TO - 15th March - 2009
STATEMENT OF FINANCE MINISTRY ON INFLATION
The following is the statement of Department of Economic Affairs, Ministry of Finance on inflation issued:
Annual (year-on-year) rate of inflation declined by 60 basis points to 2.4 per cent for the week ended February 28, 2009 from 3.0 per cent in the week of February 21, 2009, continuing a progressive deceleration of inflation beginning end October 2008, barring a two-week aberration in January 2009. Such a low rate was earlier recorded in July 2002, when inflation stood at 2.5 per cent.
Year-on-year Inflation by Commodity groups:
Commodity group examination reveals that the fall in overall inflation in the current week is almost universally across-the-board, with few exceptions, as highlighted below:
i. In 'primary articles', inflation decreased to 5.8 per cent in the week under reference, against 6.0 per cent in the earlier week. In 'food articles', inflation remained stable at 8.3 per cent in the current and previous weeks, but sub-groups such as fruits and vegetables, condiments and spices and other food articles have recorded increased rates of inflation relative to last week. In 'non-food articles', inflation fell to 1.3 per cent compared to 1.7 per cent in the previous week, while in 'minerals', the rate of decline remained steady at (-) 1.2 per cent since the week ended February 14, 2009.
ii. In 'fuel and power', prices continued to decline, at (-) 5.1 per cent vis-à-vis (-) 4.0 per cent last week, mainly on account of fall in non-administered oils.
iii. In 'manufactured products', inflation rate decreased to 4.0 per cent in the current week, from 4.5 per cent last week. Within this group, notably edible oils, basic heavy organic & inorganic chemicals as also non-ferrous metals depict a progressive decline in prices at (-) 8.3, (-)11.2 & (-) 20.8 and (-) 9.7 per cent respectively. Iron and steel has finally registered a negative rate of inflation of (-) 0.2 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 February 28, 2009 declined marginally to 7.5 per cent compared to 7.7 per cent last week, on account of fall in manufactured food products.
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 at (-) 3.2 per cent, intensified to (-) 19.7 per cent in November. In December 2008, it rose to (-) 14.4 per cent and to 1.4 per cent in January 2009 (provisionally). In February, deseasonalised inflation rate was (-) 6.8 per cent. A similar pattern of volatility is observed in inflation in manufactured products, which increased from (-) 12.6 per cent in November 2008 to (-) 0.6 per cent in January and fell again to (-) 6.9 per cent in February 2009.
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