Inflation soars to highest in more than three years

Inflation soars to highest in more than three years
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First Published: Fri, May 02 2008. 12 36 PM IST

Updated: Mon, May 05 2008. 05 54 PM IST
New Delhi: India’s inflation accelerated at the fastest pace in more than three years, vindicating the central bank’s decision to order commercial lenders to increase reserves twice last month.
Wholesale prices rose 7.57% in the week ended 19 April from a year earlier, after gaining 7.33% in the previous week, the government said.
Prime Minister Manmohan Singh, seeking to stay in power in elections due next year, has started measures to tame inflation that has doubled in the last five months. Faster gains in prices prompted the Reserve Bank of India, or RBI, to raise its cash reserve ratio to a seven-year high. “The government may take more fiscal measures as inflation will remain elevated for the next few months,” said Rajeev Malik, senior economist at JPMorgan Chase and Co. in Singapore.
Finance Minister P. Chidambaram said on Friday that inflation will be curbed, with food prices being the first to ease.
The central bank said it expects inflation of as much as 5.5% in the year to 31 March, higher than its previous year’s target of 5%.
The commerce ministry on Friday revised the inflation rate for the week ended 23 February to 5.69% from 5.02%.
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First Published: Fri, May 02 2008. 12 36 PM IST