The Hindu Business Line : Fall in inflation rate

The sharp fall in the inflation rate to 8.98 per cent from 10.72 per cent is heartening. But one cannot be too optimistic considering the rather volatile economic situation in the country and the global meltdown still not showing signs of abating.

Moreover, the improvement in the inflation has much to do with consumers reducing their spending even on essential commodities due to the high prices.

The general decline in the manufacture of consumer goods, high cost of credit and the general psychological response to the global crisis may also have contributed to the fall in inflation. It is too early to say whether it is really a positive trend.

T. R. Anandan Coimbatore

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