India’s inflation falls further to 8.4 percent (Lead)

December 4th, 2008 - 6:56 pm ICT by IANS  

New Delhi, Dec 4 (IANS) India’s annual rate of inflation dropped further to 8.4 percent for the week ended Nov 22 from 8.84 percent the week before due to a fall in prices of petroleum fuels, according to fresh data released Thursday.The annual inflation rate was 3.11 percent during the corresponding week the previous year.

The official wholesale price index (WPI) for all commodities during the week declined 0.6 percent to 233.7 from 235.1 for the previous week.

Data on wholesale prices released by the commerce and industry ministry showed that the index for primary articles, which includes food products, however, rose 0.1 percent during the week under review.

The index for fuels declined 2.3 percent due to a 23 percent drop in the prices of furnace oil, 14 percent for aviation fuel and 11 percent for light diesel oil.

The inflation rate fell sharply to 8.98 percent - a single digit after 21 weeks - for the week ended Nov 1 from 10.72 percent and kept its downward trend since then.

Though the continuous drop in inflation is welcome news, experts feel the performance of the Indian economy would depend on how developed countries stabilise their financial sectors and markets.

Dalip Kumar, head of projects at the National Council of Applied Economics Research (NCAER), an economic research institution, told IANS the rate of inflation would fall further once the government keeps its assurance of slashing petroleum prices after the assembly elections are over this month.

Six states are holding elections and the results in five will be declared Dec 8.

“The rate of inflation would moderate to below 5 percent by the middle of next year,” he said, adding that the drop would boost demand for all commodities.

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