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Inflation rises to 3.5%

Inflation rises to 3.5%
PTI
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First Published: Fri, Jan 04 2008. 01 31 PM IST
Updated: Fri, Jan 04 2008. 01 31 PM IST
New Delhi: Higher prices of some manufactured and fuel items pushed the inflation up to 3.5% for the week ended 22 December as compared to 3.45% in the previous week.
The wholesale price based index stood at 5.78% in the corresponding week a year ago.
Despite the marginal increase in the index, it remained well below RBI projection of close to 5% for the current fiscal.
During the week, furnace oil got expensive by 5% while bitumen and naptha rose by 4% and 3% respectively.
In the food article segment, prices of coffee and vegetable moved up, while gram, moong, urad and rice became cheaper.
Terming food prices as a cause of concern, Finance Minister P. Chidambaram had said “All other prices are under control. There have been occasional flare ups. Onion prices go up one day and come down another day. Edible oil goes up one day and comes down the other.
“I am basically worried about the supply-demand mismatch. We have requested the ministries concerned to do a more rigorous and realistic assessment of supply and demand,” he had said.
Chidambaram said he would be happy if there was a free inter-state movement of food articles. It would also help the cause if there were big retail chains for procurement and supplies, he added.
Analysts say the government would not find it easy to keep inflation at below 4% due to rising oil and food prices in the international market.
Oil prices are likely to remain high in the coming days due to turbulence in the Middle East, and food prices would firm up due to drought in Australia.
“In the next three months, inflation is likely to go up and we expect it to be around 5% for the current fiscal,” Crisil Principal Economist D. K. Joshi said.
He said government may pass hike in fuel prices to consumers any time.
However, Petroleum Minister Murli Deora on Thursday said price hike is not the only solution for reducing the losses faced by public sector oil firms and other option were being discussed.
“A GoM on fuel prices will meet shortly and will consider the other options,” he had said.
During the week, prices of manufactured items like bread and buns went up by 7%, while butter and cotton seed oil rose by 2%, and maida 1%.
Elsewhere, prices of bran shot by 4%, coconut oil, oil cakes and atta moved up by 1% each.
At the same time prices of cycle tyres jumped by six per cent, PVC pipes and tubings by 5%. Cement got expensive by 0.1% and body manufactured for buses rose by 12%.
However, oxygen gas cylinders were cheaper by 6%, zinc prices by 5% and zinc ingots by 2%.
Inflation figure was revised to 3.11% for the week ended 27 October against the provisional figure of 2.97% as wholesale price index finally stood at 215.4 points compared to earlier estimate of 215.1 points.
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First Published: Fri, Jan 04 2008. 01 31 PM IST