India’s inflation rate inches up to 0.7 percent (Second Lead)May 8th, 2009 - 4:34 pm ICT by IANS
New Delhi, May 8 (IANS) India’s annual rate of inflation inched up to 0.7 percent for the week ended April 25 from 0.57 percent the week before, official data showed Friday.
Among the three main commodity groups, the indices for manufactured products and primary articles rose 0.3 percent and 0.2 percent, respectively, during the week under review.
The index for fuel, power, light and lubricants remained unchanged at its previous week’s level of 323 (provisional).
The inflation rate based on official wholesale price index had declined for eight consecutive weeks to 0.27 percent for the week ended March 14, but marginally rose to 0.31 percent for the week ended March 21.
It then declined for two consecutive weeks, before rising again for the next three weeks to stand at 0.7 percent for the week ended April 25.
Between April 18 and April 25, the wholesale price index rose 0.2 percent to 230.7 from 230.2 the week before, as per the provisional data released by the commerce and industry ministry.
Sriram Khanna, head of the commerce department at Delhi School of Economics, predicted the inflation rate to continue to rise and cross 5 percent by October-end during festive season. “But it will stabilise at 4 percent by the end of this fiscal.”
Khanna said despite good crop production, consumption is yet to pick up. “We expect it to rise only in the second quarter of this fiscal,” he said.
Dalip Kumar, head of projects at the National Council of Applied Economic Research (NCAER), said though the economy was growing at a very slow pace, the marginal rise in the rate of inflation did not match the exorbitant prices of food commodities and vegetables.
“But I feel the market would correct itself in a month or two and consumption would pick up further and bring the economic growth back on track,” Kumar added.
The central bank April 21 announced a 25 basis points cut in key rates and said the economy would grow by 6 percent this fiscal, while inflation would rise to around 4 percent.
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