Union Finance Minister of India Mr. Pranab Mukherjee said that inflation figures reported for the month of June 2011 continues to be matter of concern. The Finance Minister said that we are monitoring the price situation closely. He said that Government is working together with the Reserve Bank of India (RBI - the apex bank in India) to take appropriate steps to reduce inflation to more comfortable level.
Mr. Mukherjee was reacting to the figures of headline Wholesale Price Index (WPI) inflation for the month of June, 2011 which were released on July 14, 2011. The WPI inflation for the month of June 2011 stood at 9.44 per cent as against 9.06 per cent in May 2011 and 9.74 per cent in April 2011.
The Finance Minister Mr. Mukherjee said that the reasons for increase in WPI inflation include increase in administered fuel prices, seasonal effects, an upward movement in mineral and manufactured prices and in part reflecting imported inflation. The Finance Minister said that the Food Articles inflation has however stabilised at 8.38 per cent in June 2011 from 8.37 per cent in the last month.
The Finance Minister Mr. Mukherjee said that the reasons for increase in WPI inflation include increase in administered fuel prices, seasonal effects, an upward movement in mineral and manufactured prices and in part reflecting imported inflation. The Finance Minister said that the Food Articles inflation has however stabilised at 8.38 per cent in June 2011 from 8.37 per cent in the last month.
He said that it was coming down in last two weeks. Primary Articles inflation as a whole is upto 12.2 per cent as compared to 11.3 per cent in the last month, reflecting mainly the effect of increase in mineral prices. Manufactured inflation is slightly up to 7.43 per cent in June 2011 as compared to 7.27 per cent in May 2011.
Another Asian country - China is also facing the heat of inflation.
The Wholesale Price Index (WPI) is the price of a representative basket of wholesale goods. Some countries (like India and The Philippines) use WPI changes as a central measure of inflation. However, United States now report a producer price index instead.
The Wholesale Price Index or WPI is the price of a representative basket of wholesale goods. Some countries use the changes in this index to measure inflation in their economies, in particular India – The Indian WPI figure is released weekly on every thursday and influences stock and fixed price markets. The Wholesale Price Index focuses on the price of goods traded between corporations, rather than goods bought by consumers, which is measured by the Consumer Price Index. The purpose of the WPI is to monitor price movements that reflect supply and demand in industry, manufacturing and construction. This helps in analyzing both macroeconomic and microeconomic conditions.
The wholesale price index is calculated based on the wholesale price of a few relevant commodities of over 2,400 commodities available.The commodities chosen for the calculation are based on their importance in the region and the point of time the WPI is employed. For example in India about 435 items were used for calcualting the WPI in base year 1993-94 while the advanced base year 2004-05 uses 676 items. The indicator tracks the price movement of each commodity individually. Based on this individual movement, the WPI is determined through the averaging principle.
The Wholesale Price Index or WPI is the price of a representative basket of wholesale goods. Some countries use the changes in this index to measure inflation in their economies, in particular India – The Indian WPI figure is released weekly on every thursday and influences stock and fixed price markets. The Wholesale Price Index focuses on the price of goods traded between corporations, rather than goods bought by consumers, which is measured by the Consumer Price Index. The purpose of the WPI is to monitor price movements that reflect supply and demand in industry, manufacturing and construction. This helps in analyzing both macroeconomic and microeconomic conditions.
The wholesale price index is calculated based on the wholesale price of a few relevant commodities of over 2,400 commodities available.The commodities chosen for the calculation are based on their importance in the region and the point of time the WPI is employed. For example in India about 435 items were used for calcualting the WPI in base year 1993-94 while the advanced base year 2004-05 uses 676 items. The indicator tracks the price movement of each commodity individually. Based on this individual movement, the WPI is determined through the averaging principle.
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