Statement of Finance Ministry on inflation

 The following is the statement of Department of Economic Affairs, Ministry of Finance on inflation issued here today: 



“Annual rate of inflation, year on year as conventionally measured, further declined to 10.68 per cent for the week ending October 18, 2008 compared to a rate of 11.07 per cent reported in the previous week and 12.91 per cent on the week ending August 2, 2008. Wholesale Price Index during the week further declined by 0.21 per cent from 238.8 on October 11, 2008 to 238.3 on October 18, 2008. Wholesale Price Index has been declining for 5 consecutive weeks. Inflation in the same period in the previous year at 3.11 per cent, however, was significantly lower. 



In the ‘primary articles’ group, the annual point-to-point inflation declined to 10.92 per cent, as compared to 11.53 per cent reported last week. Out of a total of 98 articles, 15 articles have shown a decline in prices in the current week as compared to October 11, 2008. These included among others, wheat, arhar, urad, moong, raw cotton, raw rubber, potatoes, groundnut seed, papaya, sapota, banana, apples, cashew nuts and corriander. Another 60 articles have shown no increase in prices. 



In the commodity group ‘fuel and power’, the rate of inflation declined to 14.09 per cent in the current week compared to the rate of inflation of 14.49 per cent in the previous week and 17.99 per cent on August 2, 2008. While the prices of furnace oil and light diesel oil declined, prices of other 16 commodities remained unchanged in the current week. Bitumin was the only commodity which witnessed an increase in prices. 



In the case of ‘manufactured products’, rate of inflation in the current week declined to 9.26 per cent, as compared to 9.53 per cent in previous week. Out of 318 commodities, a large number, 293 in all, have shown no increase in prices over the last week. In the case of 18 commodities, there has been a decline in prices. These commodities included rice bran, groundnut, gingelly and imported edible oils; lead, zinc and zinc ingots; deoiled and groundnut cake; basic and foundry pig iron; PTA; PVC resins, benzene, texturised yarn; and some steel products. Only 7 products, particularly sugar, khandsari and gur; hessian cloth and bags; building bricks; and bidi witnessed an increase in prices. 



Inflation of 30 essential commodities declined to 7.47 per cent as on the week ending October 18, 2008 from 7.80 per cent reported in the earlier week. There was a decline in the prices of 6 of these commodities and prices of other 16 commodities remained unchanged. Prices of remaining 8 items, viz. rice, jowar, bajra, gram, dry chillies, tea, sugar and gur witnessed some increase. 



Seasonal factors play an important role in build-up of inflation. Deseasonalised index, therefore, is commonly used in assessing price build up. Seasonally adjusted inflation (annualized from month over month build-up) during September 2008 is provisionally estimated at (-) 4.6 per cent.”