New Delhi: Inflation accelerated to a six-month high in the first week of February as prices of vegetables, fruits and lentils rose.
Wholesale prices climbed 4.35% in the week ended 9 February from a year earlier, faster than the previous week’s 4.07% gain, the ministry of commerce and industry said on Friday. Inflation in the country is likely to quicken further on higher energy and food costs after the government raised petrol prices last week by about 4.5%, the first increase since June 2006. Crude oil reached a record $101.32 (Rs4,052) per barrel in New York on 20 February.
“Last week’s increase in oil prices could have an indirect lagged impact of up to around 30 basis points,” said Indranil Pan, chief economist at Kotak Mahindra Bank Ltd.
“The possibility of inflation rising in the coming weeks is likely to restrain the Reserve Bank of India (RBI) from signalling any type of monetary easing immediately,” he added. RBI last month left its benchmark interest rates unchanged near a six-year high, citing concern that fuel and food costs may fan inflation in the $906 billion economy.
Inflation needs to be further slowed as it is still high by global standards, RBI deputy governor Rakesh Mohan had said last week. The index of manufactured goods, accounting for 64% of the inflation basket, rose 0.4% in the week. Primary articles, with 22% weight, rose 0.6%, the ministry said.
The commerce ministry on Friday revised the inflation rate for the week ended 15 December to 3.84% from 3.45%. The government revises the rate from two months ago after receiving additional price data.