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Thursday, September 17, 2009

Inflation is in positive zone

0.12% growth during 5 September 2009

India's headline inflation came in positive zone during the week ended 5 September 2009. Inflation was in negative zone for 14 consecutive weeks. The rally ended during the week ended 5 September 2009 when inflation recorded 0.12% growth on week on week basis.

The index of primary articles recorded 1.3% growth which includes, 2.2% growth from food articles. The higher prices of chicken (16%), fruits & vegetables (8%), pork (5%), condiments & spices (3%), bajra (2%) and rice and moong (1% each) boost the index of food articles however the prices of jowar (2%) and maize and tea (1% each) declined.

The index for 'Non-Food Articles' group declined by 1.1 %t to 238.7 (Provisional) from 241.4 (Provisional) for the previous week due to lower prices of logs & timber (19%) and soyabean (5%).However, the prices of raw silk, cotton seed and raw rubber (3% each), copra (2%) and sunflower, castor seed and groundnut seed (1% each) moved up.

The index of fuel and power grew to 343.4 from 343.3 last week due to higher prices of bitumen (9%), furnace oil and light diesel oil (4% each) and aviation turbine fuel (2%). However, the prices of naphtha (7%) declined.

The highest weight index in WPI which is manufactured product recorded 0.1% growth due to 0.4% growth in food product. Higher prices of sugar and sooji (rawa) (4% each), khandsari and bran (all kinds)(2% each) and maida, atta and gingelly oil (1% each) boost the index on elevated level.

The index for 'Textiles' group rose by 0.3 %t to 143.7 from 143.2 for the previous week due to higher prices of polyester staple fibre (5%) and hessian cloth and hessian & sackingbags (2% each).

The index for 'Rubber & Plastic Products' group declined by 0.1 %t to 169.4 from 169.6 for the previous week due to lower prices of plastic containers (6%).The index for 'Chemicals & Chemical Products' group declined marginally to 229.3 from 229.4for the previous week due to lower prices of enamels (4%) and caustic soda and thinners (2%each). However, the prices of acid (all kinds) (1%) moved up.

The index for 'Basic Metals Alloys & Metal Products' group declined by 0.1 %t to 255.2from 255.4 for the previous week due to lower prices of basic pig iron and foundry pig iron (2%each) and steel ingots (1%). However, the prices of lead ingots (4%) and other iron steel and zinc ingots(1% each) moved up.

The index for 'Machinery & Machine Tools' group rose by 0.1 %t to 172 from 172.2 for the previous week due to higher prices of material handling equipment (6%) and electrical relays (3%).

After fall in 14 consecutive week's fall, inflation recorded positive growth in the first week of September. The positive inflation has a strong indicator of rising price level specially prices of essential commodities. On other hand , double digit growth in consumer price index is adding stress on general price level. Additinally more then anticipated growth in money supply will further boost inflation in near term.

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