Thursday, January 29, 2009

Inflation for the week ended January 17 inched up to 5.64%. It was at 5.6% in the week before and at 4.45% in the corresponding week last year.

Inflation for the week ended January 17 inched up to 5.64%. It was at 5.6% in the week before and at 4.45% in the corresponding week last year.

Analysts believes that inflation will resume the south bound journey from next week onwards and will gather momentum once the cut in retail fuel prices gets factored into the inflation measured by whole sale price index.

Inflation for food articles for the week is at 11.17%. The trucker's strike, which started on January 5 and lasted for 8 days, has pushed the prices of food articles in the week before to 11.64%, which is a ten-year high.

Economists are expecting the inflation for food prices to ease further in coming months on back of an expected good rabi harvest.

The prices of fuel items inched up slightly as jet fuel and furnace oil became costlier over the week by 4% and 1% respectively. The annual inflation recorded by fuel index has been in negative territory for almost two months and is expected to dip further with the fuel price cuts getting factored in.

The central government has cut the administered price of petrol, diesel and LPG cylinders with effect from Wednesday night.

Manufactured items with a weight of 63.75% in WPI which became costlier by 30 basis points over the week is expected to witness fall in inflation rate in the coming weeks on back of falling input prices and demand destruction due to the slowing growth in economy.

Pronab Sen, country's chief statistician has earlier observed that the country will witness deflation for a slight period starting March. RBI is its latest monetary policy said that inflation will be at 3% in March.

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