Inflation surges to 11.89 per cent

July 11th, 2008 - 2:42 pm ICT by ANI  

P. Chidambaram

New Delhi, July 11 (ANI): This weeks inflation surged to 11.89 per cent in response to increases in food and commodity prices.

The inflationary trend shows an upward graph, which is expected to touch 11.9 per cent next week.

The Government has already declared that the inflation could inch up to 13 per cent before making a slow descent by September.

Last weeks inflation was recorded as 11.63 per cent.

Experts believe that double-digit inflation is likely to stay until September with the price of crucial commodities like steel is expected to rise further.

It is estimated that steel and steel products (used in industries like auto, housing, white goods and capital goods) contribute almost 21 per cent to inflation.

The inflation rate has been above 5.5 per cent for the 20th consecutive week.

Finance Minister P. Chidambaram had on Tuesday said the government was relying on monetary policy to cool demand and calm prices.

Last month, the Reserve Bank of India raised its main lending rate by 75 basis points and increased banks” reserve ratio by 50 basis points to contain inflation.

The RBIs next scheduled review is on July 29. (ANI)

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