New Delhi: Moderating prices of essential food items like onions, potatoes and milk pulled down inflation marginally to 9.11 percent in November, a development that may prompt the Reserve Bank to halt its monetary tightening strategy at its policy review on Friday.
Inflation, as measured by the Wholesale Price Index, stood at 9.73 percent in October, 2011. It was recorded at 8.2 percent in November, 2010.
A marginal decline in inflation is good news amid the depressing scenario on the industrial production and rupee front.
While industrial production declined by 5.1 percent in October, the rupee has fallen to an all-time low below Rs 53 per dollar.
With inflation dropping, all eyes are now on the RBI's monetary policy review scheduled for December 16. The central bank has been hiking interest rates since March, 2010, in its bid to tame inflation, but in the last review, the RBI had indicated it may not hike the rates in December.
As per the data released today, inflation in food articles dipped to 8.54 percent in the month under review from 10.14 percent in the same month last year. The rate of price rise in food items stood at 14.64 percent in October, 2011.
On an annual basis, the rate of price rise in the primary articles segment also dropped to 8.53 percent in November from 14.67 percent in the same month last year. Inflation in the segment stood at 18.09 percent in October, 2011.
The data also revealed that inflation in the manufactured products segment was 7.7 percent in the month under review.
In comparison, it was recorded at 5.02 percent in November, 2010, and 7.6 percent in October, 2011.
The data further revealed that rate of price rise in vegetables during the month under review stood at 12 percent, in comparison to a 1.36 percent contraction in November, 2010. Inflation in vegetables was as high as 21.76 percent in October, 2011.
However, onion prices contracted by over 34 percent in November, in contrast to an increase of 36.82 percent in the same month last year. Similarly, there was drop in the rate of price rise in potatoes and milk on a yearly basis.
First Published: Wednesday, December 14, 2011, 11:53