Inflation is down at 11.44%, down from 11.80% week-on-week. A CNBC-TV18 poll had earlier predicted inflation at 11.81% for the week ended October 4.
Inflation for week ended August 9 was revised to 12.82% from 12.6%. The Wholesale Price Index (WPI) for all commodities was down 0.5% at 239.6 week-on-week.
Reacting to the almost half-percentage fall in inflation week-on-week, Indranil Pan, Chief Economist at Kotak Mahindra Bank, said the coming down of inflation has caught him by surprise. "We were expecting (a number) close to the 12% mark because there was a small base-effect in this week," Pan said.
Elaborating on possible factors that could have led to the lower numbers, Pan said, "It could have been the passive effect of previous week’s dip in the manufacturing items. Also, globally, all commodity prices have been coming down significantly. With oil prices close to USD 73 per barrel today and looking lower because of the demand destruction globally, these would have been one of the crucial factors."
Shubhada Rao, Chief Economist, Yes Bank, said given the current trend, inflation might come down to single-digit numbers by January rather than March as earlier expected. "This has been the steepest decline week-over-week that we have possibly seen in a year or so and given this trend, January itself, we could see a single-digit number on our screens," Rao said.
Rao also said the substantial fall in the inflation number could trigger another round of repo rate cut. She said, "The probability of a rate cut now even increases further. A 50-basis point cut is on cards." Read the full interview here.
Inflation internals:
Primary articles up 0.2%; food articles up 0.7%
Non-food articles down 1%; fuel power, light down 1.1%
Naphtha down 11%, furnace oil down 5%, turbine fuel down 6%
Manufactured products down 0.5%, food products down 2.4%
Basic metals, alloys, metal products down 0.6%
Courtsy: Moneycontrol
