New Delhi: Double-digit inflation is likely to continue for a few more weeks before government efforts kick in to ease the rate of price rise, Finance Minister P Chidambaram has said.
Ahead of new inflation data to be released on 27 June, he told a television channel that he cannot guess the inflation figure, but “will remain in double digit for some more weeks.”
“I don’t know. I can’t guess the figure,” Chidambaram told Karan Thapar in an interview for the Devil’s Advocate programme to be telecast on CNN-IBN.
He, however, disagreed with a suggestion that inflation could spoil the United Progressive Alliance’s chances in the upcoming general elections.
“Well, that’s a premature conclusion. We will be defensive on inflation. All politics is about communication; we must communicate to the people why prices are high and efforts we are taking to moderate it,” he said.
Inflation touched a 13-year high of 11.05% as on 7 June, after a partial pass through of increase in global crude prices.
Government and RBI have taken several fiscal and monetary steps to cool inflation, but these measures may also have a slowdown effect on economic expansion.
Asked whether the government feels achieving nine per cent growth this fiscal would be difficult, the Finance Minister said: “There will be some moderation in growth rate, but growth will not fall precipitously.
“(Given) the structure of our economy, which is about 57% services, growth will still be above eight per cent, but the point is we want nine per cent growing up to 10%. This year we can’t hope for that,” Chidambaram said.
Poll | Inflation seen at 11.18%, 13-yr high
Mumbai: India’s annual inflation rate is expected to have jumped to a fresh 13-year high in mid-June as the effect of higher fuel prices spread to the broader economy, a Reuters poll showed on Thursday.
The wholesale price index is forecast to have risen to 11.18% in the 12 months to 14 June, which would be the highest since 8 April 1995, when annual inflation was at the same level.
Annual inflation, which hit 11.05% in early June, is expected to remain in double digits for some time, a senior finance ministry official told Reuters on Wednesday, adding it was difficult to predict when it would peak.
It would be the 18th consecutive week that the inflation rate has been above 5.5%, the central bank’s target by the end of the fiscal year in March 2009.
The data is due around noon (0630 GMT) on Friday.
On Tuesday, the Reserve Bank of India (RBI) raised its main lending rate and the proportion of deposits that banks must keep with the central bank, by 50 basis points each, to help rein in the galloping inflation rate that has more than doubled since mid-February.
It was the second time rate increase this month after India had raised state-set fuel prices by about 10% on 4 June.
The wholesale price index is more closely watched than the consumer price index (CPI) because it includes more products and is also published weekly. The CPI is released monthly. (Reuters)
‘India to continue with steps to tame inflation’
New Delhi: India will continue with measures to contain inflation and steps already taken will help moderate prices in two months, Commerce and Industry Minister Kamal Nath said on Thursday.
Nath told reporters he also expects industrial output growth of 8-9.0% in the current fiscal year to March-end. (Reuters)