National

Inflation down to 10.68%

NEW DELHI: Continuing its southward movement for the fifth week in a row, the rate of inflation eased further to 10.68 per cent for the week ended October 18 from 11.07 per cent in the previous week, mainly owing to lower prices of non-administered petroleum products and certain manufactured goods.

Considering that the slide to below the 11 per cent mark has come about for the first time in over four months, expectations are that the Reserve Bank of India may utilise the dip in wholesale price index-based inflation to cut its key rates further to lower borrowing costs and thereby spur spending, investments and growth.

In a statement here, the Finance Ministry said that inflation for 30 essential commodities had declined to 7.47 per cent from 7.80 per cent in the previous week, mainly owing to lower prices of six commodities although the prices of eight others such as rice, jowar, bajra, gram, tea, sugar and gur witnessed some increase. “Seasonally adjusted inflation during September 2008 is provisionally estimated at (–) 4.6 per cent,” it said.

Out of the 98 items in the ‘primary articles’ group, 15 saw a decline in prices which included, among others, items such as wheat, arhar, urad, moong, potatoes, groundnut seed, certain fruits, cashew nuts and coriander while another 60 articles showed no increase in prices. However, prices of vegetables went up by 2.3 per cent.

In the ‘fuel and power’ group, owing to the decline in global crude prices, furnace oil was cheaper by six per cent while light diesel oil prices declined by three per cent. Among manufactured products, prices of iron and steel eased by 0.5 per cent while zinc slipped by 11 per cent.

In all, 18 items in this category, including rice bran, groundnut and imported edible oils, witnessed a decline in prices.

Meanwhile, inflation for the week ended August 23 stands revised to 12.76 per cent from the provisional estimate of 12.34 per cent.

© Copyright 2000 - 2009 The Hindu