Inflation falls to 17-month low
Inflation fell to a 17-month low of 3.52 per cent for the week ended September 1 due to cheaper minerals, fuels and some manufactured products.
By PTI |
NEW DELHI: Inflation fell to a 17-month low of 3.52 per cent for the week ended September 1 due to cheaper minerals, fuels and some manufactured products, giving the government positive ammunition to woe investors to revive sluggish industrial production.
But low headline inflation rate alone does not guarantee the government peace of mind, as prices of some food articles like fruits have risen by a whopping 17.7 per cent.
The Wholesale Price Index-based inflation rate stood at 3.79 per cent in the previous week. It was 5.34 per cent in the corresponding week a year ago.
RBI has projected inflation close to 5 per cent for the current fiscal and 4-4.5 per cent for the medium term.
This is the third week in a row that inflation has remained below the four per cent mark, fueling expectations that the Reserve Bank may ease monetary policy.
However, analysts feel that RBI would maintain status quo in the interest rate regime, given the high oil and commodities prices in the domestic and global markets.
"I think, the RBI would pursue a wait and watch policy and tight monetary stance will not moderate immediately," Crisil Principal Economist D K Joshi said.
Inflation is still a downward risk as crude oil touched its lifetime high of 80 dollar per barrel yesterday.
But in the domestic market aviation turbine fuel turned cheaper by three per cent and furnace oil by one per cent during the week under review.
Although the food article group as a whole witnessed an increase during the week, prices of bajra, eggs, maize, moong, condiments and spices declined.
But low headline inflation rate alone does not guarantee the government peace of mind, as prices of some food articles like fruits have risen by a whopping 17.7 per cent.
The Wholesale Price Index-based inflation rate stood at 3.79 per cent in the previous week. It was 5.34 per cent in the corresponding week a year ago.
RBI has projected inflation close to 5 per cent for the current fiscal and 4-4.5 per cent for the medium term.
This is the third week in a row that inflation has remained below the four per cent mark, fueling expectations that the Reserve Bank may ease monetary policy.
However, analysts feel that RBI would maintain status quo in the interest rate regime, given the high oil and commodities prices in the domestic and global markets.
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"I think, the RBI would pursue a wait and watch policy and tight monetary stance will not moderate immediately," Crisil Principal Economist D K Joshi said.
Inflation is still a downward risk as crude oil touched its lifetime high of 80 dollar per barrel yesterday.
But in the domestic market aviation turbine fuel turned cheaper by three per cent and furnace oil by one per cent during the week under review.
Although the food article group as a whole witnessed an increase during the week, prices of bajra, eggs, maize, moong, condiments and spices declined.
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