Negative inflation "unusual", says Finance Secretary
Describing the negative inflation as "unusual", Finance Secretary Ashok Chawla on Thursday said it would not lead to any change in policy stance of the government.business Updated: Jun 18, 2009 17:20 IST
Describing the negative inflation as "unusual", Finance Secretary Ashok Chawla on Thursday said it would not lead to any change in policy stance of the government.
"Our assessment is that Wholesale Price Index (WPI) is likely to be in the negative region for sometime to come. This
is something... (that does) not really lead us to any major policy shift," he told reporters in New Delhi.
Inflation for the week ended June 6 turned negative for the first time in three decades to (minus) 1.6 per cent, even
as the prices of essential food items continued to surge.
"Inflation numbers which have come are unusual... (but) they are not unexpected," Chawla said, adding the major reason
for negative inflation is the base effect.
The wholesale price index during the corresponding week a year ago was in the double digit at 11.66 per cent. "It's a technicality borne out of the fact that fuel prices were very high during the corresponding period last year," he said.
International crude oil, currently at USD 70 a barrel, was trading around USD 140 a barrel during the same period
As a result, the fuel index slipped by 13 per cent to 326.2 from 374.2 in the the corresponding week a year ago.