| WPI Inflation Despite fiscal and monetary measures, the rate of inflation based on wholesale price index (WPI) is making new multi-year highs week after week. The divergence between this year's rate and the previous year's rate is rising constantly which is quite evident from the graph. A sudden spike in inflation for the week ending June 7 was the result of a hike in fuel prices and since then inflation has been gradually rising due to indirect impact of the fuel price rise. Inflation which is ruling at 11.89 per cent (provisional numbers for week ending June 28) is expected to go up further. In fact it is very much likely that inflation has already hit 12 per cent now, but will only get reflected when final figures are out after a lag of almost 8 weeks.
Index of Industrial Production
The industry performance which had improved in April 2008 as compared to March, suddenly slumped in the month of May. The 3.8 per cent growth in industrial production for the month of May supports the growing fears of industrial slowdown particularly in light of the dismal performance of the manufacturing sector which has risen by just 3.9 per cent. Even the electricity sector which had posted a healthy growth of 9.4 per cent during May 2007 has shown a weak performance, growing by a mere 2 per cent. For the two months of current fiscal year (April-May 2008) again the industrial performance is quite unsatisfactory - industrial growth has fallen to almost half of the previous year's numbers for the same period.
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