Statement Of Finance Ministry on Inflation

Statement Of Finance Ministry on Inflation 1/16/2009 The following is the statement of Department of Economic Affairs, Ministry of Finance on inflation issued here today: “Annual rate of inflation, year-on-year, declined to 5.2 per cent for the week ending January 3, 2009 compared to 5.9 per cent reported in the previous week, showing a decline of 67 basis points. There has been a fall of 767 basis points in a span of 5 months from peak 12.9 per cent in the week ended August 2, 2008 to the current rate. Inflation by Commodity groups Commodity group-wise examination shows that year-on-year inflation in all groups has continued to record decline in the current week too. i. In ‘primary articles’, the rate of inflation decreased to 10.9 per cent, compared to 11.6 per cent reported last week. Within this group, inflation in the sub-groups of food and non-food articles declined to 9.5 and 9.6 per cent respectively. Inflation in the mineral sub-group remained steady for the third consecutive week at 40 per cent due to high inflation in iron and manganese ores, fluorite, magnesite, phosphorite and felspar. ii. In ‘fuel and power’, the rate of inflation declined further to (-) 1.3 per cent, compared to (-) 0.7 in the previous week. iii. In “manufactured products”, the inflation rate decreased to 5.6 per cent, compared to 6.2 per cent in the last week. But in the sub-groups of sugar, khandsari and gur, common salt, tobacco products, textiles, rubber tubes, cement, slate & graphite, basic metals & alloys, inflation still remains in double digits. For the combined food index (weight = 25.43 per cent), the year-on-year inflation in the week ended January 3, 2009 was lower at 7.9 per cent compared to 8.5 per cent last week. Cereals, pulses and fruits continue to register high inflation rates, ranging from 9 per cent to 20 per cent. Contribution of Commodity groups Contribution of primary articles to the year-on-year inflation rate for the week ending January 3, 2009 show that this group accounted for 46.6 per cent, as against their share of 22 per cent to the WPI basket. The contribution of the fuel and power group was (-) 5.5 per cent vis-à-vis share of 14 per cent. Manufactured products accounted for 59.3 per cent against a share of 64 per cent in the commodity basket.” PIB

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