Inflation at 6.55 per cent; at 26 months low

India’s inflation rate based on Wholesale Price Index (WPI) eased to 6.55 per cent in January 2012 year on year basis. This figure is slower than expected and brought some relief comparing December 2011 (7.47 per cent) figures. It stood at 9.47 per cent a year before in January 2011.

  • The fall in the food inflation, particularly vegetables, has contributed the most in this moderation in inflation figures in January 2012.
  • Still, prices of edible oils, milk and protein based items, eggs, fish and meat etc. have shown rise in prices.
  • Headline inflation slowed to its lowest level in last two year.
  • RBI has ceased the interest tightening cycle from October and now, this pleasant news raises hopes for reversal in policy action in first quarter of next fiscal year.
  • Fuel inflation is still stubbornly high and international crude price picture is still worrying
  • As per government’s expectation, the Indian Economy is expected to grow at 6.9 per cent in the current fiscal.
  • All eyes are on coming fiscal deficit which is expected to be higher than budgeted target of 4.6 per cent.
Last Update Tuesday 14th February 2012     

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