Inflation at 3.92%

19 Feb 2009 | 13:37 Inflation at 3.92%
The official Wholesale Price Index for All Commodities (Base: 1993-94 = 100) for the week ended 7 February 2009 stood at 3.92% as compared to 4.39% for the previous week and 4.98% during the corresponding week of the previous year. It was the index's lowest annual rise since 3.83% on 29 December 2007.

The manufacturing sector, which has highest weightage in total WPI, declined 0.4% to 199.7 from 200.6 for the previous week. The major contributors to the fall in manufacturing segment were: leather and leather product; basic metals alloys and metal products, which registered a fall for the week ended 7 February 2009 compared with a week ago. Also the textile industry, one of the major contributors of manufacturing index declined 0.7% to 139.0 from 140.0 for the previous week due to lower prices of cotton yarn-cones (4%) and cotton yarn-hanks (1%). Meanwhile, the prices of cotton knitted garments (4%) and texturised yarn and hessian cloth (2% each) moved up.

However the index of food product, chemical and chemical product, non-metallic mineral products grew up for the week ended 7 February 2009 compared with a previous week.

The primary article index, which comprises food and non-food articles, registered a fall of mere 0.2% for the week ended 7 February 2009 as against previous week due to decline in non-food articles group. However the index for food articles group rose 0.1% to 244.9 from 244.7 for the previous week due to higher prices of moong, masur, urad and arhar (2% each) and gram and maize (1% each).

Going further the index for fuel, power, light and lubricants group rose 0.5% to 323.5 from 321.8 for the previous week mainly due to higher prices of naphtha (10%) and furnace oil (5%). However, the prices of aviation turbine fuel (5%) and light diesel oil (1%) declined. The government reduced retail fuel prices on 28 January 2009 for the second time in less than two months amid fall in crude oil prices.

The wholesale price index sustained on downward path and moved towards the RBI's projection set for March 2009. The plunge in industrial production in December 2008, negative growth in export sector and surge in fiscal deficit craft an anxiety for the growth projection.

To arrest the slowdown and boost up the industrial activity, apex bank of India may go for more round of rate cut. The recent and rapid downward inflation trend is providing the central bank with headroom for further monetary easing. The RBI governor has also indicated the same saying that there is room for cutting interest rates further as the impact of the global recession on India was sharper than expected.

Comments

Post a Comment

Popular posts from this blog

Asian equities start week on bearish note

12 Jan 2009 | 15:46 Asian equities start week on bearish note Asian equities turned in a mostly bearish performance on the very first session of the week as weak cues from the US markets and continued concerns over the global economic conditions hurt the sentiments. On Friday, the US non-farm payrolls printed a loss of 524000 in December, close to previous estimates of 525,000. For the month of December, unemployment in the world's largest economy rose to a whopping 7.2 percent, the highest rate not seen since 1993. The rise stemmed from losses in every sector category including financial services and manufacturing, the latter, which incidentally showed a trimming of 149,000 positions.  The data also wrapped up the government's layoff count for the year 2008, marking it as the worst for labor since World War II ended in 1945. The US equity markets extended their losing spree and Dow Jones industrial avera
Read more

Asian Market registers convincing recovery

16 Jan 2009 | 16:03 Asian Market registers convincing recovery Stock markets in Asian region closed higher on Friday 16 January 2009, showing some sign of improvement at the end of week convincing recovery from Thursday's big falls. The regional markets followed the gains on Wall Street registered last night. In the region, technology and resource stocks showed some upbeat. On Wall Street, the stock markets showed sign of improvement despite of disappointing economic data, falling crude price and the overall financial sector. The Dow Jones Industrial Average ended higher by 12.3 points at 8,212, the Nasdaq closed higher by 22.2 points at 1,511 and the S&P 500 closed higher by 1.1 points at 843.74. Meanwhile, news of Bank of America might require bailout money to finance the Merrill Lynch acquisition came true as U.S. officials early Friday disclosed they have agreed to provide Bank of America Corporation (BAC) with a
Read more

Strong rally at Wall Street

29 Jan 2009 | 10:04 Strong rally at Wall Street Stocks at Wall Street managed a strong end with good gains on Wednesday, 28 January, 2009. Financials led the way today as Wells Fargo decided that it will keep its dividend intact and will not ask for additional TRP funds. Stocks also rose today after Federal Reserve's latest policy statement. The Dow Jones Industrial Average ended higher by 200 points at 8,375, the Nasdaq closed higher by 53 points at 1,558 and the S&P 500 closed higher by 28 points at 874. Citigroup, Wells Fargo and Bank Of America were the main Dow winners today. In the earning arena today, Boeing and AT&T reported unimpressive quarterly results. WellPoint's latest earnings were in-line with expectations. Yahoo! and ConocoPhillips both topped earnings estimates. Today, The Federal Open Market Committee kept its interest rate target in a range of zero to 0.25%, as expected. It
Read more