The annual rate of inflation reaches to 10-month low this week plunging from last year’s high of 12.91% to this week’s low below to 6%, a more than 50% fall within six months.
The annual rate of inflation calculated on point-to-point basis is continuously going downwards since September and dipped to 5.91% for the week ended December 27, 2008, as against previous week data of 6.38% for the week ended December 20, 2008, the Whole sale Price Index (WPI) reported. It was at 3.83% during the corresponding week of last year, WPI added.
According to Ministry of Finance, which comments after the latest WPI data release, the 47 basis point of fall held due to lower prices of certain food items and Chemical product prices; while market experts estimate that it is because of fuel price reduction in the domestic market and crude price reduction in the international market, which had made the transportation of foods, vegetables and other essential commodities cheaper.
But now the analysts think that the prices of foods and other crucial commodities may go higher on the back of truckers and oil employees’ strike, if it goes longer. Nearby 4,000 transport associations have called for a nationwide strike since Monday despite the threat of Essential Services Maintenance Act (ESMA) while Oil Sector Officers Association (OSOA) has also called the strike from Wednesday, demanding higher wages.
This week the primary articles group that comprises food article and non-food article group has decreased to 0.48% from 12.07% for the week ended December 20, 2008 to 11.59% for the week ended December 27, 2008 on the basis of price sinking in jowar (5%), fruits & vegetables (3%) and eggs and bajra (1% each) and sunflower (8%). However the price of urad, raw rubber and raw silk went up by 1%, 10% and 5% respectively.
In ‘Manufactured Product’ group – the group of ‘Food Products’, ‘Textiles’, ‘Paper & Paper Products’, ‘Chemicals & Chemical Products’ group and ‘Machinery & Machine Tools’ group – fell to 0.3% due to the lower prices of rice bran oil and imported edible oil (1% each), polyster staple fibre (2%), newsprint (1%), acid (all kinds) (27%), acetylene (4%), oxygen (1%) and enamelled copper wires (28%).
But despite continuous sliding of inflation, the prices of essential food products are still high in the retail market. In the wholesale market, the unrefined oil (14%), khandsari (2%), groundnut oil and gur (1% each) became costlier.
The annual rate of inflation based on final index, calculated on point to point basis, stood at 8.70% as compared to 8.98% (Provisional) reported earlier vide press note dated November 14, 2008.
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