India Aug 2 WPI inflation 12.44% vs 12.01%

[B. Karthick]

India Aug 2 WPI inflation 12.44% vs 12.01%
Thursday, Aug 14
NEW DELHI - India's headline inflation rose to a fresh 13-year
high of 12.44% for the week ended Aug 2 from 12.01% in the previous
week, the commerce and industry ministry said today.
The rise in inflation rate, based on Wholesale Price Index, is
mainly on account of food articles and fuel during the week.
In the week ended Aug 2, index for all commodities rose 0.3% to
240.0 from 239.6 a week earlier. The all commodities index had fallen
0.05% on week to 213.8 in the corresponding week last year.
The inflation rate was 4.39% a year ago.
The latest inflation rate is above consensus estimate. According
to a
NewsWire18 poll of 19 analysts, the inflation rate was seen rising to
12.21% for week to Aug 2.
India's headline inflation rate has been rising sharply since the
beginning of this calendar year and has stayed in double digits for
the past nine weeks.
The finance ministry said the spurt in inflation was a major
disappointment.
"After being nearly stable for four weeks, this rise has come as a
major disappointment," the ministry said in a statement.
The government and the Reserve Bank of India have announced a
series of fiscal, administrative, and monetary steps in the past two-
three months to tame prices.
The latest monetary steps to curb inflationary pressures in the
economy came in the quarterly review of the monetary policy in the
last week of July, when the RBI raised the repo rate 50 basis points
to 9%, and the banks' cash reserve ratio 25 basis points also to 9%.
With the latest rate hikes, the RBI has raised short-term
benchmark rate by 125 basis points and CRR by 150 points since the
beginning of the current financial year.
Prime Minister's Economic Advisory Council Chairman Wednesday
projected the inflation rate to moderate to 8-9% by March-end compared
with RBI's target of close to 7%.
In the week to Aug 2, the WPI for main commodity groups was as
follows:
--Primary articles at 249.5, up 0.6% from 247.9 a week earlier;
food
articles 238.1, up 0.9% from a week ago; non-food articles 246.7, up
0.2% on week.
--The fuel, power, light and lubricants group was at 380.4, up
0.9%
from 377.0 a week earlier. The group has 14.2% weight in the WPI.
--The index for manufactured products--with 63.7% weight in WPI--
was at 206.0, down 0.05% from 206.1 a week earlier.
All numbers are provisional and may be revised after eight weeks.

FINAL INDEX
The final index for all commodities for the week to Jun 7 was
236.5,
compared with the provisional estimate of 235.2. Consequently, the
final inflation rate for the week was 11.66% compared with the
provisional 11.05%.

Below are the provisional levels, week-on-week and year-on-year
changes, in per cent, in the indices of key commodity groups:

Weight Aug 2 Wk-on-wk Yr-on-yr
2008 % change %
change

ALL COMMODITIES 100.0 240.4 0.33 12.44
Commodity groups
----------------
I. PRIMARY ARTICLES 22.0 249.5 0.65 11.43
Food articles 15.4 238.1 0.89 7.20
Food grains 5.0 227.8 0.62 5.61
Cereals 4.4 223.5 0.49 5.82
Pulses 0.6 259.2 1.37 4.18
Vegetables 1.5 250.0 -3.70 -7.10
Fruits 1.5 264.8 8.88 22.76
Non-food articles 6.1 246.7 0.16 16.20
Fibres 1.5 236.7 0.00 30.20
Oil seeds 2.7 256.1 -0.16 17.26
Minerals 0.5 648.4 0.00 50.86
Metallic minerals 0.3 967.0 0.00 55.29

II. FUEL, POWER, LIGHT
& LUBRICANTS 14.2 380.4 0.90 17.99
Coal mining 1.8 254.4 0.00 9.84
Mineral oil 7.0 493.6 1.46 28.51
Electricity 5.5 276.5 0.00 1.39

III. MANUFACTURED PRODUCTS 63.7 206.0 -0.05 10.75
Food products 11.5 211.8 -0.47 13.26
Grain mill products 1.0 237.3 0.00 4.68
Edible oils 2.8 197.6 -1.20 15.35
Oil Cakes 1.4 359.4 -1.16 49.75
Textiles 9.8 141.6 0.07 6.63
Cotton yarn 3.3 173.0 0.00 9.77
Drugs & medicines 2.5 316.4 0.00 0.25
Cement 1.7 222.1 0.00 3.11
Iron & steel 3.6 362.4 -0.06 35.32
Aluminium 0.9 250.8 0.00 -0.59
End

B.Karthick
Research Analyst.