Inflation plunges to 6.61%

The annual rate of inflation calculated on point-to-point basis continuing its downward movement in single digit for the seventh successive week has plunged 0.23% at 6.61% for the week ended for December 13 this year.

According to the latest (Wholesale Price Index) WPI data, the rate of inflation for all commodities stood at 6.61% as against the previous week’s 6.84%, while it was 3.84% last year for the same corresponding week.

The government decision of slashing petrol and diesel prices by Rs. 5 and Rs.2 fuelled this consistent dipping, as market experts believe. The price of crude oil has fallen down from $147 per barrel to below $38 per barrel.

On the other hand, the WPI reports that this week’s inflation has decreased due to sharp falling in ‘Chemicals & Chemical Products’ and Non-Metallic Mineral Products’ like cement (2%).

However, commenting on the latest WPI data, the Ministry of Finance stated that despite fall in overall inflation rate, the prices of primary articles continued to rule high due to the base effect.

The prices of essential commodities such as seasonal vegetables, rice, maize, tea, and arhar, sugar, certain edible oils, steel products and cement have declined, and contributed mostly to the descending trend, said the ministry in a released statement.

In the primary article group, the index for 'Non-Food Articles' group rose by 0.8 percent due to higher prices of groundnut seed (4%), castor seed (2%) and copra (1%), while the index for ‘Fuel, Power, Light & Lubricants’ remained unchanged.

The index for ‘Manufactured Product’ group declined by 0.3% on the back of declination in index for ‘Food Products' group fell by 0.1%, index for ‘Textiles’ group sank by 0.1%, ‘Non-Metallic Mineral Products’ group plunged by 1.1% and index for ‘Basic Metals Alloys & Metal Products’ group by 0.4%, while the index for ‘Paper & Paper Products’ group climbed by 0.2%.

The final wholesale price index for ‘All Commodities’ stood at 10.82 % as against 10.68% (Provisional) reported earlier vide press note dated October 31, 2008.