National

Inflation dips to 12.4 per cent

NEW DELHI: Contrary to market expectations, the rate of inflation dipped marginally to 12.40 per cent for the week ended August 16 from 12.63 per cent the previous week, mainly owing to a moderation in the prices of vegetables, meat, cement and a few non-administered petroleum products even as certain other essentials turned dearer.

The official data on the wholesale price index (WPI), released here on Thursday, showed that the slide in the annual point-to-point inflation rate was for the first time in a month. The previous decline from 11.91 to 11.89 per cent was recorded for the week ended July 12.

Earlier during the day, fears of higher inflation, coupled with rising crude oil prices, made the Bombay Stock Exchange’s 30-share sensitive index (Sensex) slump by over 248 points and close at nearly a one-month low of 14,048.34 points. National Stock Exchange’s Nifty also shed 78.10 points to end the day’s trading at 4,214, as selling pressure set in ahead of the release of the WPI data in the evening.

The break in the trend of rising prices came as a relief to the government. “There are some early signs of moderation of inflation,” the Finance Ministry said in a statement, while noting that the prices of 21 items out of 98 in the ‘primary articles’ declined and another 48 items remained steady.

Apart from lower prices of vegetables, meat, egg and fish, more significant was the decline in the inflation rate for the ‘fuel and power’ commodity group from 17.99 to 16.76 per cent, mainly owing to lower prices of naphtha, furnace oil and light diesel oil.

However, in the case of “manufactured products,” the rate of inflation went up to 11.02 per cent from 10.91 per cent owing to higher prices of 18 products such as sugar and khandsari, mustard and gingelly oil, hessian bags and cloth, computer and computer-based systems, electric motors and some steel items.

© Copyright 2000 - 2009 The Hindu