“Annual rate of inflation, year-on-year as conventionally measured, declined to 8.84 per cent for the week ending November 15, 2008 compared to a rate of 8.90 per cent reported in the previous week. Though the Wholesale price index in the current week rose marginally from 235.0 as on November 8, 2008 to 235.1 on November 15, 2008, for the third week in a row inflation continues to be in single digit with the decline moderating further to 6 basis points as compared to 8 basis point last week and 174 basis points witnessed in the week ending November 1, 2008. In the previous year, on November 17, 2007 inflation at 3.35 per cent was significantly lower.
An analysis of the contribution of commodity groups to year-on-year inflation rate for the week ending 15 November shows that primary articles covering food, non-food and minerals (having a weight of 22.03 per cent in the WPI basket), accounted for nearly 31 per cent of inflation, the major contributor being food articles. While fuel and power (with a weight of 14.23 per cent) contributed 19 per cent to the inflation rate, the manufactured products (with a weight of 63.75) accounted for 50 per cent of the inflation. Within manufactured products, the non-food contributed more than 44 per cent to the overall inflation.
In the ‘primary articles’ group, the annual year–on-year inflation increased further to 11.90 per cent, as compared to 11.66 per cent reported last week. Out of a total of 98 articles, 21 articles have shown a decline in prices in the current week as compared to November 8, 2008. These included among others, fish-marine, sapota, brinjal, peas (green), cashewnuts, ginger dry, raw rubber, tapioca, gram, cotton seed, tea, groundnut seed, , raw cotton, turmeric, potatoes, raw silk coconut and some spices. A total of 55 articles have shown no increase in prices. There was an increase in inflation rate for 20 items, which included tomatoes, soyabean, papaya, cabbage, some pulses and a few cereals.
In the commodity group ‘fuel and power’, the rate of year–on- year inflation declined to 7.81 per cent in the current week compared to an inflation of 8.21 per cent reported in the previous week. Prices of all 19 commodities reported in this group remained unchanged over the previous week.
In the case of ‘manufactured products’, the year-on-year inflation rate in the current week declined marginally to 8.01 per cent, as compared to 8.02 per cent in previous week. Out of 318 commodities, a large number, 276 in all, have shown no increase in prices over the last week. For 21 commodities, there has been a decline in prices. These commodities included among others, ferro silicon, steel ingots, PVC fittings & accessories, basic and foundary pig iron, cotton oil seeds, vitamin liquids, imported edible oil, rice bran oil, zinc, synthetic yarn, gur, groundnut cake, steel sheets, plates and strips, groundnut oil and sugar. A total 21 products, particularly acetylene, bran, cotton yarn-cones, gingelly oil witnessed an increase in prices.
Inflation of 30 essential commodities increased by 40 basis points to 8.00 per cent as of the week ending November 15, 2008 from 7.60 per cent reported in the earlier week. There was an increase in the prices of primary essential commodities including pulses such as urad, masoor, moog, arhar and cereals like wheat, rice, bajara and atta. There was also an increase in the prices of onions. The prices of other essential commodities moderated or declined over previous week.
The monthly deseasonalised inflation rate has been negative during September and October, suggesting a continuing moderation in WPI inflation in the coming months. For the month of October 2008, the deseasonalised inflation for primary food showed some increase, though there was significant decline in inflation rate of manufactured food. The overall monthly deseasonalised inflation in manufactured products shows a continuing decline since September 2008.”
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