Inflation falls further to 0.18 percent

April 16th, 2009 - 1:59 pm ICT by IANS  

New Delhi, April 16 (IANS) India’s annual rate of inflation fell to 0.18 percent for the week ended April 4, from 0.26 percent the week before, official data showed Thursday.
Inflation rate had declined for eight consecutive weeks to 0.27 percent for the week ended March 14, but marginally rose to 0.31 percent for the week ended March 21. It has continued to decline since then.

Between April 4 and March 28, the wholesale price index rose by 0.4 percent to 228.2 (provisional) from 227.3 (provisional) the week before, data released by the commerce and industry ministry showed.

Among the three main commodity groups, the index for manufactured products and primary articles rose 0.1 percent and 1.1 percent.

The index for fuel, power, light and lubricants rose 0.5 percent to 322.6 (provisional) from 320.9 (provisional) for the previous week due to higher prices of aviation turbine fuel (12 percent), naphtha (8 percent), light diesel oil (3 percent) and bitumen (2 percent).

However, the prices of furnace oil declined 1 percent. The index for this group for the previous week was at 320.9 (provisional).

Inflation rate does not necessarily mean that prices have fallen, but that the rate of rise in prices has come down, not the actual prices.

Economists have already warned of a deflation - a decline in the general price level. It is caused by factors such as low money supply and credit, and a curb in spending by households, industry or government.

Lower demand during deflation often leads to a rise in unemployment.

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