India’s inflation rate falls further to 8.84 percent (Lead)

November 27th, 2008 - 6:37 pm ICT by IANS  

New Delhi, Nov 27 (IANS) India’s annual rate of inflation measured on a point-to-point basis dropped marginally to 8.84 percent for the week ended Nov 15 from 8.9 percent the week before, according to fresh data released Thursday.The annual inflation rate was 3.35 percent during the corresponding week the previous year.

On a week-to-next-week basis, however, the official wholesale price index (WPI) for all commodities during the week rose 0.04 percent to 235.1 (provisional) from 235 (provisional) the previous week.

According to data released by the commerce and industry ministry, for the week under review, the index for primary articles rose 0.1 percent compared to the previous week.

The index for fuel, power, light and lubricants largely remained unchanged at its previous week’s level of 353.3 (provisional).

The rate of inflation fell sharply to 8.98 percent - a single digit after 21 weeks - for the week ended Nov 1 from 10.72 percent for the week before.

Economists feel that once the government keeps its assurance of bringing down petroleum prices after the current round of assembly elections are over, the rate of inflation will come down further. Six states are holding elections and the results are expected to be out by mid-December.

Dalip Kumar, head of projects at the National Council of Applied Economics Research (NCAER), told IANS that the fall in petroleum products expected after the assembly elections would bring down prices of commodities further.

“This would make available more demand for commodities in the market and would also strengthen the economy,” he added. He expects the rate of inflation to moderate further by the middle of next year.

Reacting to the terror attacks in Mumbai, Kumar said such acts would have a negative effect on the economy. “There is already an economic slowdown. Such terror attacks would only compound the situation further,” he added.

He said the performance of the Indian economy would depend on how developed countries stabilise their financial sectors and markets.

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