Inflation – not alarming – Really?

By Vijay Kumar

As per the Finance Ministry,

Annual rate of inflation further moderated to 12.34 per cent for the week ending August 23, 2008 compared to 12.40 per cent reported a week earlier and 12.63 per cent for the week ending August 9, 2008.

In the ‘primary articles' group, the annual point-to-point inflation declined to 10.79 per cent, as compared to 11.63 per cent reported last week and 11.83 per cent for the week ending August 9, 2008. Out of a total of 98 articles, 18 articles have shown a decline in prices in the current week as compared to August 16, 2008. These included among others, rice, jowar, moong, masur, arhar and urad, tomatoes, groundnut, mustard, caster and linseed, marine fish and raw rubber. Another 54 articles have shown no increase in prices.

In the commodity group ‘fuel and power', the rate of inflation declined from 17.99 per cent as on August 9, 2008 to 16.69 per cent in the week ending August 23, 2008. Prices of all the 19 commodities in this group remained unchanged in the current week.

In the case of ‘manufactured products', rate of inflation in the current week increased to 11.28 per cent, as compared to 11.02 per cent in previous weeks. Out of 318 commodities, a large number, 294 in all, have shown no increase in prices over the last week. In the case of 7 commodities, there has been a decline in prices. These commodities include edible oils (rice bran, cottonseed, mustard and gingelly oils), groundnut oil cake, zinc and synthetic yarn. Only 17 products, particularly sugar, hessian bags, mustard and groundnut oil, zinc and lead ingots, deoiled and mustard cake, caustic soda, nylon filament yarn, cast iron spun pipes, newsprint and white printing paper and acids witnessed an increase in prices.

Inflation of 30 essential commodities also declined to 6.90 per cent as on the week ending August 23, 2008 from 7.24 per cent reported in the earlier week. Decline in the prices of rice, most of the pulses and mustard oil resulted in moderation of inflation rate for essential commodities.