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India's inflation rate for the week ended September 5 turned positive after 13 weeks at 0.12%. In the preceding week, the rate was negative at 0.12%.
The annual rate of inflation was 12.42% for the corresponding week of the preceding year, say data released Thursday by the Ministry of Commerce and Industry.
Build-up inflation during this fiscal year so far was 5.86%, compared to 6.62% in the corresponding period of the previous year. The 52-week average inflation for the week ended September 5 was 3.43%, it said.
Going by the provisional figures, the wholesale price index or WPI for all-commodities rose by 0.4% to 242.0 from 241.1 for the preceding week.
Inflation, based on WPI, increased, due to the higher prices of poultry chicken, fruits and vegetables, bajra, rice, moong, bitumen, furnace oil, light diesel oil, as also aviation turbine fuel and some manufactured products.
The final estimate of inflation for the week ended July 11 was lowered to minus 0.63% from the previous week's provisional figure of minus 1.17%.
The increase in the prices of poultry chicken, fruits and vegetables, pork, condiments and spices, bajra, rice, as also moong under the "Food Articles" category, besides raw silk, cotton seed, raw rubber, copra, sunflower, castor seed, as also groundnut seed in the "Non-Food Articles" group pushed the growth rate of index for Primary Articles to 1.3% from the previous week's level. However, those of logs and timber, soyabean, jowar, maize, as also tea declined.
The index representing fuel, power, light and lubricants rose marginally to 343.4 from 343.3 from the previous week, due to the higher prices of bitumen, furnace oil, light diesel oil, as also aviation turbine fuel. However, the prices of naphtha dropped.
The index for Manufactured Products rose by 0.1% due to the higher prices of material-handling equipment, polyester staple fibre, sugar, sooji, lead ingots, electrical relays, khandsari, maida, as also atta, whereas that of oilcakes, enamels, plastic containers, coconut oil, rice bran oil, imported edible oil, butter, caustic soda, thinners, basic pig iron, foundry pig iron, as also steel ingots dropped.
Reserve Bank of India or RBI Governor Duvvuri Subba Rao said Tuesday in New Delhi that key policy rates would not be changed due to inflationary pressures until the country came out of the woods of the global financial crisis and the economy was back on the high-growth track. The RBI has cut its benchmark interest rate six times from October 2008 through April 2009.
He added: "In taking a call on the monetary policy on exiting from the accommodative monetary policy, we will not exit until we are sure that recovery is secured. Soon thereafter, we will have to unwind the accommodation."
Prime Minister's economic advisor and former Governor of RBI C. Rangarajan said wholesale price inflation was a real threat to growth for the economy, and could limit the nascent recovery seen in recent months, adding that inflation could head to around 5-6% in six months, causing some unwinding of easy monetary policy measures.
He added that the stimulus measures that were undertaken by the developed world and countries like India and China were very significant. He was expecting the stimulus measures to continue for some more time; but beyond a particular point, he cautioned. there would also be a need to exit from some of the extraordinary measures undertaken.
Amol Agarwal, Economist, Mumbai-based IDBI Gilts, said: "Inflation is already positive again, and the RBI faces a real tough task. The Governor has said he wants to keep interest rates low till the economy recovers fully, but inflation is galloping and being responsible for inflation, it can't be ignored."
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