RBI all set to curb inflation

Concerned over the spiralling food prices, the Reserve Bank has indicated at tightening money supply to contain the rising inflation pressures.

The Reserve Bank is slated to come out with the third quarter review of its monetary policy on January 29 amid intense speculations that it may signal an interest hike to tighten money supply to contain the rising inflation.

The food inflation was nearly 19 per cent last week while the overall wholesale price inflation rose massively to 4.78 per cent in November compared to 1.34 per cent in October.

The deputy governor further said the near-term policy challenges are clearly conditioned by the evolving growth-inflation outcome that supports shifting the balance of policy focus on managing the recovery and on containment of inflation.

Inflation rises to -0.12 percent from -0.21 %

(posted under - Inflation updates) India's food prices jumped an annual 14.8 percent by end of August after a dry spell hurted crops, adding to concerns inflation could climb above the comfort zone of policy makers and herald an end to a soft monetary stance.

The widely-watched wholesale price index fell by a steeper-than-expected 0.12 percent in the 12 months to Aug. 29, its 13th successive fall, mainly due to statistical aberration caused by last year's high energy prices. The WPI figure compares with last week's 0.21 percent annual decline and a market forecast for a decline of 0.08 percent.

The food articles index accelerated to a 14.8 percent rise, from a year earlier, from 14.5 percent the previous week, as drought engulfed nearly half India's districts, hurting summer crops and forcing the government to intervene to bolster supplies and crack down on hoarding.

Wholesale price index Weekly Inflation at (-1.21 %) - July 4/09

Weekly whole price index rose from -1.55% to -1.21 % for week ended july 4 as government increased the price of fuel in corresponding week which led to increase in whole sale price index or inflation.

Following the government decision to raise fuel prices effective July 1, prices of naphtha rose 15 per cent, furnace oil 11 per cent, petrol 10 per cent, high-speed diesel 7 per cent and light diesel oil by 4 per cent.

However consumer price index is still alarming high

inflation updates - Annual inflation at 0.61 percent

(28/5/09 - Inflation updates) - The wholesale price index rose 0.61 percent in the 12 months to May 16, matching the previous week's annual rise, government data showed today.

It was below a median forecast of 0.74 percent in a Reuters poll of analysts. The annual inflation rate was 8.66 percent during the corresponding week of the previous year.

It may be noted that The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.

Annual Inflation at 0.61 percent

India's wholesale price index rose 0.61 percent in the 12 months to May 9, above the previous week's annual rise of 0.48 percent, government data showed on Thursday.

It matched a median forecast of 0.61 percent in a Reuters poll of analysts. The annual inflation rate was 8.57 percent during the corresponding week of the previous year.

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The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.

Inflation at 0.3 perc as on May 2nd

India's annual inflation rate is expected to have fallen back towards zero at the start of May after rising in the previous three weeks, a Reuters poll of analysts showed on Wednesday. The median forecast of 11 analysts was for 0.3 per cent rise in the wholesale price index in the 12 months to May 2, compared with a 0.7 per cent rise the previous week.

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The price index is forecast to rise from a week earlier but at a slower pace than the rise a year earlier, when prices were rising rapidly, leading to a fall in the annual inflation rate. "A sharp rise in the index is expected week-on-week, but lower growth year-over-year is seen because of a high statistical base," said Rupa Rege Nitsure, chief economist at Bank of Baroda.

"The weekly spike is largely due to primary articles, secondly the market-determined prices of fuel components, and also rising input costs are getting reflected in the manufactured product prices," she said.

The inflation rate had fallen to 0.18 per cent in early April, its lowest reading since annual records started in 1977/78. The index had been on a downward trend since last September, after a fall in global commodity prices and cuts in state-set fuel prices, but steadied in March and early April before turning up in recent weeks.

Inflation lowers but food items prices skyrocket

Annual inflation fell to a three- decade low of 0.26 per cent, although prices of essential food items rose by up to 17 per cent, shows data released just days ahead of the country going to general elections.

Wholesale prices-based inflation declined by 0.05 percentage points for the week ended March 28 from 0.31 per cent in the previous week.

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Even as the point-to-point inflation is near zero level, the average rate of price rise works out to be 8.4 per cent for the fiscal 2008-09 against 4.7 per cent in 2007-08.

Edible items like salt, sugar, milk, cereals, pulses, manufactured food products, spices and fruits were selling at higher rates for the week under review than a year ago.

In the backdrop of fall in sugarcane production, sugar prices soared by 17 per cent leaving a bitter taste. Inflation has become a key election issue, with political parties promising cheap rations for the poor.

Salt prices too went up by 10.68 per cent, milk by 6.22 per cent, cereals by 9.61 per cent, pulses 8.46 per cent and fruits by 8.02 per cent. However, drop in prices of minerals, metals, fuel, power and lubricants helped pull down the over all inflation to a three decade low.

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With the inflation dropping to such a low, analysts feel that the Reserve Bank of India may signal further cut in interest rates. RBI Governor D Subbarao reviewed the interest rate scenario with the heads of commercial banks in Mumbai yesterday.

"Inflation is low due to crisis in demand and crisis of confidence. It is low (also) due to base effect," said economic research body, RIS' Director-General Nagesh Kumar.

The Finance Ministry described the year-on-year price rise as "stable". It said the inflation of primary articles declined for the week ended March 28, 2009 from the previous week.

However, there was 3.46 per cent point-to-point annualised price rise for these articles. Further disaggregation of food articles shows that several items were selling at higher prices.

posted under - Inflation, Indian inflation updates, April inflation updates, Inflation at all time low, indian economy updates, economy of india, india and inflation
source - www.economictimes.com

Wholesale Inflation at all time low of 0.44 percent

Inflation for the week ended March 7 fell to an all time low of 0.44%. The sharp fall in inflation was due to several factors including easing prices of food articles and fuel items along with a high base effect. Annual inflation as measured by Wholesale Price Index (WPI) was at 2.42% in the week before and at 7.78% in the corresponding week last year.

The inflation for food articles eased considerably to 7.34%. It had touched a 10-year high of 11.64% in the beginning of the year. Prices of food articles for the week ended March 7 touched the lowest since the beginning of the year.

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The sharp fall in annual inflation as measured by fuel index was due to fall in prices of jet fuel and electricity for agriculture each of which fell by 8%. The fuel prices are currently witnessing negative inflation to the range of 6% and are expected to dip further into negative territory.

The higher base effect along with low demand in the economy is expected to keep inflation in negative territory for 5 to 6 months." Inflation will turn negative starting from April and will remain so until the end of 2009," said Tushar Poddar, an economist with Goldman Sachs Inc. in Mumbai. "We expect the Reserve Bank to ease liquidity" to support growth. The International Monetary Fund (IMF) said this week India should rely more on monetary policy to support the economy as high public debt makes fiscal efforts difficult.

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Retail inflation as measured by the consumer price index for industrial workers has moved up to 10.45% in January, the highest since December 1998. The consumer-price index for farm workers increased 11.62% in January from a year earlier, following an 11.14% in December. The central bank said this month consumer prices will decline after a lag, without specifying a time frame.

The commerce ministry today revised the rate for the week to Jan. 10 to 5.46 percent from 5.60%.

posted under - inflation updates, indian economy blog, economy of india, indian inflation updates, march inflation updates, economic crises updates

Inflation for week inches Up - due to trucker's strike

Breaking the 10-week down ward streak, whole sale price inflation for the week ended January 10 inched up to 5.6% on the back of firmer food prices. The inflation for food items has touched a 10-year high of 11.64% as the trucker's strike, which went on from January 5 to 12, made food items costlier. Wholesale price inflation was at 5.24% in the week before and was at 4.36 % in corresponding week last year.

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Economists dismissed the spike in inflation as a blip in the easing trajectory of inflation. More than 5 million Indian truckers have gone on strike from January 5 to 12 creating a shortage for food items and making it costlier over the week. Vegetables became costlier by almost 19% over the week while the prices of fruits and cereals also moved up. Inflation for food items moved up by one and a half percentage points from the previous week’s levels.

The 10-year benchmark bond yields closed at 5.84 %, after inflation came slightly above market expectations. The yields have touched a high of 6% in the morning trade. The 10-year bond yields is a percentage point above record low of 4.86% of January 5, following rate cuts by the central bank.The yields of ten year papers closed at 5.89% on Wednesday.

posted under - Indian inflation updates, inflation january 2009, inflation in india, Indian inflation updates, indian economy blog, inflation updates

Cheers!! Inflation down to single digit - November 2008

The inflation rate fell sharply to a near six-month low of 8.98% for the week ended November 1, a drop of almost 4% from its August peak.

The decline is due to less demand in the market for the commodities.The decline, helped by a steep drop in prices of some petroleum products and metals, will provide a welcome relief to the central government reeling under a raft of bad news on the economic front from falling exports and a drop in tax collections. Politically, this could help the government ahead of key state elections later this month.

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Inflation as measured by the wholesale price index (WPI) — the most watched inflation measure — dropped 1.74% from 10.72% in the preceding week, official data from the Office of the Economic Advisor in the ministry of commerce and industry showed. It hit a peak of 12.91% in early August, but still remains more than double the 3.35% inflation seen in the same week last year.

“I was surprised by the quantum of fall in the fuel index. After consolidating around this level for coming weeks, I expect the inflation number to drop to the 8% territory by end-November,” said ICRA economist Saumitra Chaudhari and a member of the prime minister’s economic advisory council.

The fall in fuel prices, especially those which are not government-controlled, is expected to have a positive impact for the manufacturing sector, going forward since fuel is a key input cost for industry. For instance, the cost of jet fuel comprises almost 40% of the operational cost of an airline.

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Food prices inched up marginally during the period, rising 0.1%, but analysts expected the food articles index to move down in coming weeks, given the forecasts for a robust winter harvest.

Crisil principal economist DK Joshi said that the slowdown in the economy meant that both demand-supply side pressures were easing and inflation would not emerge as a major concern until the overall economic growth revived.

We can also get a cut in fuel prices as government is thinking about a fuel price cut. It may be noted that Crude oil prices have come down to US$ 58 level when compared to $ 147 levels few months back. so more drop in inflation is predicted by me in coming future due to possible fuel price cut by indian government.

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- with extracts from economictimes.com

Inflation down at 10.68%

Inflation fell below 11% to 10.68% during the week ended October 18 from 11.07% a week earlier.Earlier, a poll showed that the inflation rate was expected to have eased below 11% in mid-October for the first time in almost five months, thanks to falling commodity prices.

Eleven economists forecast a median 10.82% rise for wholesale price index based inflation rate in the 12 months to October 18, compared with 11.07% a week earlier, the slowest annual rise since late May.

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"Everything has fallen," said Kaushik Das, an economist with Kotak Mahindra Bank. "Oil prices fell sharply, the manufacturing index has come down and even the food and commodity prices which were pushing up inflation have started coming down."

The wholesale price index rose 11.07% in the 12 months to October 11, below the earlier week's annual rise of 11.44%. Inflation for the week ended August 16 was revised up to 12.82% from 12.40%.

In early August, the inflation rate had hit 12.91%, the highest reading since annual numbers in the current data series became available in April 1995. It jumped into double digits after a hike in government-controlled retail fuel prices in June.

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Commenting on the current economic scenario, the finance minister recently said that although inflation was still high, the rate of price rise would moderate further as global commodities and fuel prices continue to soften.

The government will also continue to take steps to moderate inflation and cut wasteful expenditure as it expects its fiscal deficit to swell beyond the 2008/09 target, the finance ministry said.

-source economictimes.indiatimes.com

Inflation down by 0.2%

Moderating global crude oil prices over the past few weeks worked behind 12.4 per cent inflation for the week ended August 16.Following dip in prices of vegetables, meat and cement, it is 0.2 per cent less than that in the previous week. Finmin considered inflation figure an early sign of moderation in prices.

It went on to reaffirm the fact that prices of most items in the WPI basket have either declined or remain unchanged and the annual rate of inflation in two of the three major commodity groups showed signs of moderation

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