Inflation rate falls to 52-week low

Since inflation is calculated on a point-to-point basis the government is now, ironically, reaping the benefits of a lower rate of inflation on account of the petroleum price hike effected in the first week of July last year.

The sharp increase in wholesale price index (WPI) in the corresponding week last year due to petroleum prices hike led to the inflation this week being calculated on a higher base in comparison to the last week thus pulling it down by a massive 1.2 percentage points.

It may be recalled that during the corresponding week last year, the rate of inflation had jumped 1.6 percentage points to 5.8 per cent on account of the petro-product price hike.

Meanwhile, the official WPI for `all commodities’ (base 1981-82=100) rose by 0.2 per cent to 325.0 (provisional) during the week as against 324.5 (provisional) the week before.

The annual rate of inflation based on the final index for the week ended May 10, 1997, stood at 5.9 per cent, as against 6.0 per cent for the week based on provisional index.

Compared to the 4.70 per cent inflation in all commodities, the rate of increase in price of `primary articles’ was 4.03 per cent, while in `manufactured products’ and `fuel, power, light and lubricants’ it was 4.35 per cent and 8.45 per cent.

During the reference week, the increase in prices of the group, fuel, power, light and lubricants came drastically down to 8.45 per cent from 18.25 per cent during the previous week.

Interestingly, the rate of price rise based on consumer price index for industrial workers (CPI-IW) also fell from 9.3 per cent in April to 7.32 per cent in may when WPI-based inflation was six per cent.During the week among the various major groups, index for primary articles rose by 0.3 per cent to 335.6 from 334.6, fuel, power, light and lubricants remained unchanged at its previous week’s level and manufactured products rose marginally.