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Inflation Falls Further to -1.55%

Food prices are higher, but inflation stays in the negative terrain

Inflation is still down, but food prices are soaring. Quite contradictory, but that is the reality as revealed again by the inflation figures today. And the reality has extended into the fourth week now.

At -1.55 per cent, inflation for the week ended June 27, has fallen even further than the previous week’s -1.30 per cent.

Aside from the high-base effect (It was at 12.03 per cent in the corresponding week a year ago ) keeping the inflation figure so low, the most recent reason for the fall has been attributed to the decline in the price of manufactured goods.

From butter to fish, fruits & vegetables, there was almost no essential food item that was spared, including pulses like arhar, urad and moong.

The ‘Food Articles’ group jumped by 0.5 percent due to higher prices of fish-marine (10%), arhar and fruits & vegetables (2% each) and urad and moong (1% each).

There was a silver lining to the high-price cloud with certain prices falling: eggs (10%), tea (3%), bajra (2%) and maize and masur (1% each).

The Wholesale Price Index may rise when the recent fuel price increases bite into the economic data. The rise was by Rs 4 and Rs 2 for petrol and diesel respectively.

However, these figures are provisional and can change in the future. For instance, for the week ended May 2, the inflation arte was given provisionally as 0.48 and this has been revised to 1.48 per cent.