wow . inflation @ less than 0.5 % ! ! !

steering

I can't really believe that inflation reached its lowest level in the last 30 years .

but in my view , except vegetables, all essential commodities are more or less the same price . see the price of rice , milk and gas etc , I doubt the real inflation may be far from reality.

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LilBoy BigTown

Each country has its own way of doing numbers. But yeah, the real inflation's gotta be much higher.

Aishah

Mod Note: I have moved your post out of Chennai to here - it's really one for Chai and Chat but you don't have enough posts to access that yet. Later when you do, we will move it on to there.

I suppose if they stay the same price that would reflect the inflation wouldn't it. If inflation is up, don't the prices go up? Sorry, I'm not an economist, and have very basic knowledge of this sort of thing.
Yes, as you say all commodoties are still the same price - everything went dearer with the cost of diesel and petrol increasing, so the prices reflected transportation costs. Nothing has come down since. Even though diesel and petrol have dropped in price, those veggies etc. are still the same.

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luckyshibu

reduction in inflation doesn't mean reduction in prices! it merely means reduction in rate of increase of prices! for eg lets say Price of 1kg chicken last year increased by 3% from 100 rs in 2007(3% inlation reported in 2008 same week)so in 2008 same week rate would 103. If this year same week iflation reported is 0.5 it would mean rate would be 103.515. So there is till increasein price but at a lower rate.

In addition the reduction in rate of inflation reported is mainly due to reduction in cost of manufatured items and fuel, and resuction in prices of certain other items in "Essential category" Food prices infact have risen a lil more compared to last year or remained same.

TErm deflation is what tells whether there is actuall reduction in prices or not. But again It can be good an bad for economy! A big topic in itself!

jyotirmoy

There is really nothing WOW about it. It simply means that manufactured goods are not selling despite dropping prices, which in turn results in lesser production, hence lesser money earned by the manufacturers, lesser wages and lesser spending on expansion and welfare. People wanting to buy property will go in to watch & wait mode expecting further fall so real estate busines will be stagnating, demand for items like steel & cement will fall further.
Not a good scenario.

shashank.aggarwal

I don't have much Idea about the impact that this would have. But I guess it has something to do with the big jump in prices that came in for few months back. Everything was bloated out of proportion. Its just the correcting affect, and I guess we will enter the deflation stage soon and prices would normalise again.

As per the commodities, the prices in the wholesale markets are coming down, however they will reflect to general public after a month, as of now the retailers are making a kill.

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Aishah

Thanks luckyshibu and Jyotiji, for clarifications - it's helping me understand OP's post more clearly. I mainly see price increases in veggies, fruit, and petrol and I grumble a lot about it. Petrol has now dropped, so that's good but those staples for food, haven't. Will be good if they do, as you say, Shashank.

delhiwala

What does this inflation number means....

Apples are still selling Rs. 140 a KG. Simple dals are Rs. 60-70 per KG....

Yeah Prices of LCD TV, Double Door Fridges and Swanky Mobiles are coming down......

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edwardseco

Ah, deflation is its own great nightmare as indicated above. That may be why the USa decided to go 3rd world and print a trillion in extra paper off the presses..

jyotirmoy

"Yeah Prices of LCD TV, Double Door Fridges and Swanky Mobiles are coming down......"
Yeah this is what I had said in my earlier post. Now go and ask the employees of the companies producing these... no increments, no bonus, downsizing and all that.
Japan had a decade of deflation referred to as wasted decade.
The rabbi crop output is predicted to fall by 2% this year and that means rise in food prices. That also means putting on hold purchase of white goods.... the circle or the viscious circle begins.

shashank.aggarwal

Don't know what part of the city you are living in, my mom just told me that good quality apples are under Rs.50 per kg. here.

And as I said earlier, retailers are making a kill and it would take a month for things to normalize. Few months back the retailers were buying a particular dal for Rs.55 per kg and selling it for Rs.60 per kg. But these days they are getting the same dal for Rs.40 per kg, and still selling it for Rs.60 per kg. It would be few weeks when the competitive forces would drive down the prices.

And I was standing by my mom other other day when she was buying vegetables from one of the carts, and everything seems to be in range of Rs.10 per kg (I mean the common stuff). I don't call that expensive.

jyotirmoy

Shashank bhai,
delhiwala may be refering to prices of imported apples.

Nick-H

The price of Basmati rice is still double what I used to pay for it when I first came here.

The Tomato Index (newspapers seem to set great store by the price of tomatoes, and I guess they and onions are a vital part of any shopping basket here) has, apparently, plummetted. But vegetable prices can shoot up and down in days according to climate, transport problems, etc.

The property market, here at least, seems fairly static; rents (which lagged far behind land prices for quite a while) have doubled in places. I hear of poor people now having to pay 2,000 for little better than slum huts. Has a shop worker's salary tripled in a few years? no. Domestic work salary? Definitely not.

bad news for synagogues...

jyotirmoy

Nick that was a good dig... ha ha ha

steering

I agree with shibu , nick and others. iam not an economist . if the inflation go sub-zero we call it deflation and its bad for the country . but when the prices are damn cheap , its supposed to make common man / poor man happy?

because when the inflation is at above 12% people were crying fowl and there were lot of hoopla all over the country against rising inflation .

and we all know japan's "lost decade " due to deflation.

its a complex topic as shibu said .