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Charts & Analysis

PA Inflation Falls To 7.74%, Lowest Since July 2009

Primary Articles Inflation has fallen to 7.74% for the week ended 19 Nov 2011. This is the lowest since July 2009.

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There is both a high base effect and a lowering of prices that’s working in favour of bringing down inflation.

But of course:

  • Coal prices – Coking, non-Coking etc. – have not been updated since Feb 11. Prices have gone up substantially since; this is not part of primary articles,though.
  • According to the index, tomato prices are up 71% in the last year. I don’t think they are as popular as onions, otherwise some TV channel would have thrown a fit by now.
  • It’s winter, and with a great monsoon, expect prices to come down substantially. For the next three months, there shouldn’t be more than 7% headline inflation in the WPI. We’ll probably resume with inflation in Feb next year.
  • Shiv Kumar says:

    Retail tomato prices per kg went up from Rs 16-18 last year to Rs 30 and now available for Rs 20 per kg in Mumbai. Actually one can see a sharp reduction in prices of fruits and vegetables. Papayas sold earlier for around Rs 30 per piece are available for Rs 15-18. Oranges are also reasonably priced.
    But Surti Kolam rice is priced at around Rs 38 per kilogram. It was available for around Rs 32 more than a year ago.
    On the whole one can expect inflation to go down sharply. Interest rates will go down with a lag effect. Let us see how it actually works out.