Inflation rate enters negative zone at -1.61 per cent
18 Jun 2009
The annual rate of inflation based on the wholesale price index turned negative, for the first time since 1997, falling to -1.61 per cent (provisional) for the week ended 6 June 2009 as compared to 0.13 per cent (provisional) for the previous week and 11.66 per cent during the corresponding week (ended 07 June 2008) of the previous year.
The official wholesale price index for 'all commodities' (base: 1993-94 = 100) for the week ended 6 June 2009 rose 0.04 per cent to 232.7 (provisional) from 232.6 (provisional) for the previous week.
The inflation rate had last turned negative in 1977. India is also the only country now to record deflation though the European region is nearing the zero rate of inflation because of the recession.
The index for the primary articles group declined 0.7 per cent to 256.0 (provisional) from 257.7 (provisional) for the previous week.
The WPI is expected toremain in negative zone for 2-3 months, says Citi India economist Rohini Malkani.
"Of the headline -1.6 per cent WPI, 1.3 perc ent was attributed to primary articles but this was offset by a -2.89 per cent contraction in the fuel index," Malkani explains.
Malkani says,"While negative WPI readings will likely persist for the next 3 months, we expect inflation to edge up to 4 per cent by year end."
She also says that on a seasonally adjusted month-on-month basis, the WPI which was negative / flat since September 08 has turned positive.
The index for 'food articles' group declined by 1.2 per cent to 250.8 (provisional) from 253.9 (provisional) for the previous week due to lower prices of fruits and vegetables (-7 per cent), fish-marine (-2 per cent) and urad and gram (-1 per cent each). However, the prices of arhar (7 per cent), jowar and eggs (3 per cent each), masur and maize (2 per cent each) and moong, mutton, ragi, condiments and spices and bajra (1 per cent each) moved up.
The index for 'non-food articles' group rose 0.7 per cent to 235.9 (provisional) from 234.3 (provisional) for the previous week due to higher prices of soyabean (11 per cent) and raw rubber and gingelly seed (1 per cent each). However, the prices of copra (2 per cent) and castor seed, raw silk and groundnut seed (1 per cent each) declined.
The index for the `fuel, power, light and lubricants' group rose 0.7 per cent to 326.2 (provisional) from 324.0 (provisional) for the previous week due to higher prices of furnace oil and naphtha (7 per cent each) and light diesel oil (4 per cent). However, the prices of bitumen (3 per cent) declined.
The index for the `manufactured products' group rose 0.1 per cent to 203.8 (provisional) from 203.5 (provisional) for the previous week.
Among primary articles, the index for 'food products' group rose 0.4 per cent to 233.8 (provisional) from 232.8 (provisional) for the previous week due to higher prices of salt (10 per cent) and rice bran oil, sugar and cotton seed oil (1 per cent each). However, the prices of groundnut oil and imported edible oil (-1 per cent each) declined.
The index for the 'textiles' group rose 0.2 per cent to 141.7 (provisional) from 141.4 (provisional) for the previous week due to higher prices of polyester staple fibre (3 per cent) and hessian cloth (1 per cent).
The index for the 'rubber and plastic product' group rose 1.1 per cent to 167.9 (provisional) from 166.0 (provisional) for the previous week due to higher prices of tractor tyres (8 per cent), motor tyres (4 per cent) and giant tyres (2 per cent).
The index for 'basic metals alloys and metal products' group rose marginally to 255.4 (provisional) from 255.3 (provisional) for the previous week due to higher prices of lead ingots (4 per cent) and foundry pig iron and basic pig iron (1 per cent each). However, the prices of steel ingots (7 per cent) and steel sheets, plates and strips and zinc ingots (-1 per cent each) declined.
The inflation rate for the week ended 11 April 2009 has been revised to 0.96 per cent from the 0.26 per cent (provisional) as the final wholesale price index for the week ended 11 April 2009 stood at 230.4 as compared to 228.8 (provisional) reported earlier.
