Has inflation started cooling off?

The annual rate of inflation for the week ended July 19 once again rose marginally to settle at 11.98 per cent as against 11.89 per cent for the previous week. On a weekly basis, however, the wholesale price index, which is used as the basis for measuring inflation, rose only 0.1 per cent to 239.3 from last week8217;s figure of 239, thereby reaffirming the finance ministry8217;s claim that inflation has started to stabilise. The rise in inflation was due to a rise in the prices of food articles and manufactured products.

The ministry issued a statement in response to the inflation data, saying that inflation on a week-to-week basis had continued to remain stable. It said the prices of a majority of commodities either showed a decline or remained unchanged while the prices of only a few rose marginally. In the primary articles group, the prices of 15 items declined while those of 58 others showed no change. In the case of manufactured items, out of 318 commodities, prices of 288 did not show any change while those of 10 articles, including rice bran oil, groundnut oil, imported edible oil, showed a decline.

Analysts believe the effects of the central bank8217;s steps to tighten liquidity have finally started feeding through.

11.98 Annual rate of inflation for the week ended July 19