The Hindu : Business : Inflation falls below 7 p.c.

Online edition of India's National Newspaper
Saturday, Dec 25, 2004

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Business

Inflation falls below 7 p.c.

By Our Special Correspondent

NEW DELHI, DEC. 24. For the first time in many months, inflation fell below the 7 per cent mark to 6.73 per cent for the week ended December 11. Also, this was the third consecutive week of falling inflation, lending credence to the recent statement of the Union Finance Minister, P. Chidambaram, that the "worst was over'' as far as inflation was concerned, provided international oil prices remained stable.

Incidentally, the Reserve Bank of India had reported on Thursday that with the easing of oil prices and improved farm output (rabi crop), inflation was expected to moderate over the coming months in line with 6.5 per cent projection made in the mid-term policy review.

The point-to-point inflation measured through the Wholesale Price Index (WPI) was down by 0.29 per cent for the week ended December 11, a 21-week low, from the previous level of 7.02 per cent. It was 5.80 per cent in the year-ago period.

The index of primary articles' group was down by one per cent to 186 due to cheaper food and non-food items.

It was 181.2 in the year-ago period. Food articles' group index fell by 1.3 per cent to 185.4 while fuel, power, light and lubricants' group index fell by 0.1 per cent to 288.8.

During the week under review, the global crude oil futures plunged to a five-month low of less than $41 a barrel, prompting the Organization of the Petroleum Exporting Countries (OPEC) to decide on a cut in production from next year to stem sliding prices.

Meanwhile, the Government has revised upwards inflation to 7.21 per cent for the week ended October 16 as compared to the provisional level of 7.10 per cent.

The final WPI stood corrected at 188.8 in mid-October as against the provisional figure of 188.6.

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