labels: economy - general
Inflation soars to 7.51 per cent news
Our Economy Bureau
07 August 2004

New Delhi: The latest wholesale price index (WPI) data was released by the government yesterday. The year-on-year inflation rate went up by almost a full percentage point, from 6.52 per cent for the week ended July 17 to 7.51 per cent for the latest recorded week ending July 24.

There is more bad news to follow as this inflation number does not take into account the increase in prices of diesel and petrol effected by the public sector oil companies on July 31. Prices of diesel were raised by roughly 6 per cent and that of petrol by 3 per cent. This, would push up the inflation rate further, when the government comes out with the WPI data for the week ending July 31.

However, the immediate impact of the diesel and petrol price hike may not be large. For one, the combined weight of the two transport fuels in the WPI comes to 2.90849 per cent (2.02034 for diesel and 0.88815 for petrol), which is hardly a fifth of the total weight of 14.22624 per cent for the `fuel, power, light and lubricants (FPLL)' group. An average price increase of 5 per cent for the two fuels would mean an increase of one per cent in the FPLL index, from 274.4 for the week ended July 24 to about 277.1 for the week ending July 31. In other words, a jump of less than 3 points. Considering a relative weight of 14.22624 per cent for the FPLL index in the general index, this translates to a rise of 0.4 in the overall WPI, from 186.2 to 186.6 for the week ending July 31.

During the corresponding period last year, the WPI went up from 173.2 to 173.4 for the week ended August 2, 2003. That, in effect, would mean that the inflation rate in the coming week would be in the region of 7.61 per cent, even after taking into account the recent transport fuel hike.


 search domain-b
  go
 
Inflation soars to 7.51 per cent