Inflation rate drops further to 0.27 per cent despite firm prices

The annual rate of inflation based on the wholesale price index declined further, hitting a 30-year low at 0.27 per cent (provisional) for the week ended 14 March, even as prices of some essential commodities like cereals and vegetables rose during the period.

Government data showed a 0.17 percentage point decline in the WPI inflation from the 0.44 per cent (provisional) recorded in the week ended 7 March. There is, however, no significant drop in consumer price index (CPI), which relates to the prices of consumer goods including fruits and vegetables.

The annual rate of inflation stood at 8.02 per cent during the corresponding week (ended 15 March 2008) of the previous year.

The official wholesale price index for 'all commodities' (base: 1993-94 = 100) for the week under review rose 0.1 per cent to 227.0 (provisional) from 226.7 (provisional) for the previous week.

The index for the `primary articles' group rose marginally to 245.6 (provisional) from 245.5 (provisional) for the previous week.

Among primary articles, the index for 'food articles' group rose 0.1 per cent to 242.7 (provisional) from 242.5 (provisional) for the previous week due to higher prices of barley (2 per cent) and bajra, maize, fruits and vegetables, masur, urad and rice (1 per cent each each). However, the prices of fish-marine and tea (-3 per cent each), moong (-2 per cent) and condiments and spices and gram (-1 per cent each) declined.

The index for 'non-food articles' group declined by 0.1 per cent to 223.2 (provisional) from 223.4 (provisional) for the previous week due to lower prices of raw wool (-22 per cent), logs and timber (-7 per cent), castor seed (3 per cent) and linseed (2 per cent). However, the prices of niger seed, raw silk and raw rubber (4 per cent each) and fodder (3 per cent) moved up.
 
The index for the fuel, power, light and lubricants group remained unchanged at its previous week's level of 321.0 (provisional)

The index for the manufactured products group rose 0.2 per cent to 199.6 (provisional) from 199.2 (provisional) for the previous week.

The index for 'food products' group rose 1.2 per cent to 215.3 (provisional) from 212.8 (provisional) for the previous week due to higher prices of oil cakes (7 per cent), imported edible oil (6 per cent), gur (4 per cent) and maida, sooji (rawa), rice bran oil and cotton seed oil (1 per cent each). However, the prices of bran (all kinds) (-3 per cent), rape and mustard oil and coconut oil (-2 per cent each) declined.

The index for the 'textiles' group declined by 0.9 per cent to 139.3 (provisional) from 140.5 (provisional) for the previous week due to lower prices of cotton yarn-cones (-4 per cent). However, the prices of polyester staple fibre (1 per cent) moved up.

The index for 'non-metallic mineral products' group rose 0.6 per cent to 218.3 (provisional) from 217.1 (provisional) for the previous week due to higher prices of cement (1 per cent).

The index for 'basic metals alloys and metal products' group rose 0.6 per cent to 257.3 (provisional) from 255.7 (provisional) for the previous week due to higher prices of zinc ingots (13 per cent), zinc (10 per cent), lead ingots (8 per cent), MS bars and rounds (7 per cent), other iron steel, basic pig iron and foundry pig iron (6 per cent each), steel sheets, plates and strips (3 per cent) and pipes and tubes (1 per cent). However, the prices of steel ingots (plain carbon) (-4 per cent) declined.

The index for 'machinery and machine tools' group declined by 0.2 per cent to 172.1 (provisional) from 172.4 (provisional) for the previous week due to lower prices of electric motors: phase one (-5 per cent), electric motors (-3 per cent) and electric motors: phase three (-2 per cent).

The annual rate of inflation based on final index for the week ended 17 January 2009 stood at 4.95 per cent as compared to 5.64 per cent (provisional) reported earlier, the government release said.