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Charts & Analysis

PA Inflation Drops to 6.92%

For the week ended 26 Nov 2011, Primary Articles Inflation has dropped to 6.92%, the lowest since July 2009.

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As you can see it’s not just the rising “base” figure of last year, but the trend in the graph points downwards.

Unfortunately since much of the data is not updated in time – some data is left unchanged for three years! – I would not be too gung ho just yet. The consumer basket, measured by the CPI(IW) and CPI (Urban), is still in double digits.

  • Mehul says:

    Deepak,
    In light of this, do you see interest rate cycle reversing? or at least, staying put and no increasing?

  • bemoneyaware says:

    From Food inflation
    Food price inflation has been falling continuously for five weeks, helped by increased arrivals of cereals in the markets. Wheat prices actually fell by 4.71 per cent on a year-on-year basis. And the extent of increase in rice prices also was low at 2.34 per cent (2.52 per cent in the preceding week).
    What helped the sharp drop in food inflation is a steep decline in the prices of onion and potato.Onion prices fell by 39.2 per cent and potato by 15.75 per cent. As a result the price index for vegetables as a group fell by 1.25 per cent.
    But will the trend last?Commodities broker KASSA group’s director and economist Siddarth Shanker cautioned that the decline could be temporary and was more due to seasonal and statistical effects. “The fundamentals still remain the same and will likely lead to higher inflation in the coming weeks