India’s inflation falls to 4.0pc on lower food prices
Sunday, 19 August 2007
NEW DELHI, Aug 18 (PTI): Lower prices of essential food items, particularly vegetables and fruits, pulled down inflation to a one-and-half-month low of 4.05 per cent for the week ended August 4, compared to 4.45 per cent in the previous week.
On year-to-year basis, wholesale prices-based inflation declined by over one per cent as it had stood at 5.08 per cent during the corresponding period of the previous fiscal.
Inflation was hovering between 4-4.50 per cent for the past two months, with the lowest figure at 4.03 per cent during the week ended June 16.
The inflation figures have been released more than a month after the RBI raised CRR by 0.5 per cent to 7 per cent, but refrained from hiking other key rates in view of low inflation.
However, inflation has to be watched over a longer duration for any possible reduction in interest rates, which is also unlikely in view of excess liquidity in the system as well as inflationary expectations pointed by the Reserve Bank, analysts said.
According to economic think-tank NCAER, hardening crude oil and metal prices may push up inflation to 5.11 per cent for the current fiscal.
"The role of high economic growth (9.4 per cent in the last fiscal) exerting pressure on prices also needs to be kept in mind," the report said, adding that the overall setting for the fiscal is one of high growth and high rate of inflation. Prices of fruits and vegetables turned substantially cheaper. While vegetable prices fell by 6.5 per cent, fruits became cheaper by 2.6 per cent.
Among other food items, egg, meat and fish also turned cheap. However, pulses showed a mixed trend, but averaged higher on the price scale.
Tea went up by seven per cent, arhar by four per cent while rice and milk were expensive by one per cent.
In the fuel, power, light and lubricants category, aviation turbine fuel got costlier by four per cent followed by furnace oil which moved up by one per cent.
In the manufactured category, food products like imported edible oil got cheaper by two per cent, bran by five per cent, and oil cakes and sunflower oil by one per cent each.
Besides, prices of basic and foundry pig iron softened by four per cent, lead ingots were down by three per cent and zinc ingots by one per cent.
Other products which got cheaper included methanol (four per cent), bopp film (three per cent).
However, batteries were dearer by two per cent and laid woven paper by two per cent.
The wholesale price index, on which inflation is based, declined by 0.1 per cent to 213.1 points during the week under review from 213.4 per cent in the previous week.
On year-to-year basis, wholesale prices-based inflation declined by over one per cent as it had stood at 5.08 per cent during the corresponding period of the previous fiscal.
Inflation was hovering between 4-4.50 per cent for the past two months, with the lowest figure at 4.03 per cent during the week ended June 16.
The inflation figures have been released more than a month after the RBI raised CRR by 0.5 per cent to 7 per cent, but refrained from hiking other key rates in view of low inflation.
However, inflation has to be watched over a longer duration for any possible reduction in interest rates, which is also unlikely in view of excess liquidity in the system as well as inflationary expectations pointed by the Reserve Bank, analysts said.
According to economic think-tank NCAER, hardening crude oil and metal prices may push up inflation to 5.11 per cent for the current fiscal.
"The role of high economic growth (9.4 per cent in the last fiscal) exerting pressure on prices also needs to be kept in mind," the report said, adding that the overall setting for the fiscal is one of high growth and high rate of inflation. Prices of fruits and vegetables turned substantially cheaper. While vegetable prices fell by 6.5 per cent, fruits became cheaper by 2.6 per cent.
Among other food items, egg, meat and fish also turned cheap. However, pulses showed a mixed trend, but averaged higher on the price scale.
Tea went up by seven per cent, arhar by four per cent while rice and milk were expensive by one per cent.
In the fuel, power, light and lubricants category, aviation turbine fuel got costlier by four per cent followed by furnace oil which moved up by one per cent.
In the manufactured category, food products like imported edible oil got cheaper by two per cent, bran by five per cent, and oil cakes and sunflower oil by one per cent each.
Besides, prices of basic and foundry pig iron softened by four per cent, lead ingots were down by three per cent and zinc ingots by one per cent.
Other products which got cheaper included methanol (four per cent), bopp film (three per cent).
However, batteries were dearer by two per cent and laid woven paper by two per cent.
The wholesale price index, on which inflation is based, declined by 0.1 per cent to 213.1 points during the week under review from 213.4 per cent in the previous week.