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Thursday, August 27, 2009

Inflation stood at 0.95%

Growth on week on week basis

The official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 15th August 2009 rose by 0.6% to 238.8 from 237.4 for the previous week. The annual rate of inflation, calculated on point-to-point basis, stood at -0.95 % for the week ended 15 August 2009 compared with 1.53% last week and 12.82% during the week ended 6 August 2008.

The index for primary articles group rose by 2.1% to 268.4 from 262.9 for the previous week. In this group, t he index for 'Food Articles' group rose by 3.2% to 270.) from 262.0 for the previous week due to higher prices of fish-inland (25%), eggs (10%), masur (8%), milk and moong (5% each), condiments & spices (4%), fruits & vegetables and jowar (3%), mutton and arhar (2% each) and urad and maize (1% each). However, the prices of fish-marine (9%) declined.

The index for 'Non-Food Articles' group declined by 0.5% to 240.3 from 241.4 for the previous week due to lower prices of groundnut seed (3%). However, the prices of castor seed (2%) and raw rubber, raw silk, rape & mustard seed and cotton seed (1% each) moved up.

The index for fuel and power group remained unchanged at its previous week's level of 338.2.

The index for manufactured group rose by 0.1% to 206.4 from 206.1 for the previous week.

The index for 'Food Products' group rose by 0.7% to 234.2 from 232.5 for the previous week due to higher prices of sugar and khandsari (2% each) and cotton seed oil (1%). However, the prices of gur and salt (1% each) declined. The index for 'Textiles' group declined by 0.1% to 143.6 from 143.7 for the previous week due to lower prices of hessian cloth and hessian & sacking bags (2% each) and texturised yarn (1%).

The index for 'Chemicals & Chemical Products' group rose by 0.2% to 228.0 from 227.5 for the previous week due to higher prices of epoxy resins (72%) and acid (all kinds) (1%). However, the prices of caustic soda (sodium hydroxide) (1%) declined. The index for ' Basic Metals Alloys & Metal Products' group rose marginally to 255.2 from 255.1 for the previous week due to higher prices of steel ingots (plain carbon) and zinc ingots (1% each). The index for 'Machinery & Machine Tools' group declined by 0.1 % to 171.8 from 171.9 for the previous week due to lower prices of hydraulic machine (2%).

India's headline inflation is moving in negative zone but growth on week on week basis has been adding stress on price level and indicating underline price pressure. On other hand consumer price index and food inflation are continuously moving upward along with higher money supply which will push inflation on higher side in long term. At this note , RBI may think of tightening monetary policy.

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