Inflation: Back to square one?

Inflation: Back to square one?

Mumbai: It looks like an old tape playing repeatedly now. Inflation numbers come out. They are typically higher than expected and a government official makes soothing noises.

Food inflation numbers that came in on Thursday were a tad higher from a week ago. For the week ended 12 February, the rate of food price hike came in at 11.49% versus 11.05% the previous week. It was also the first time in three weeks that this index accelerated.

Fuel price inflation, which is bound to face the heat of rising international crude oil prices, came in at 12.14% versus 11.92% in the previous week.

Today, it was the turn of the Prime Minister. Manmohan Singh said that inflation and a growth are a delicate balance. But he assured that it will be no more than 7% by the end of this fiscal.

Sure, a look at the monthly rolling average of food inflation does show that it is trending down.

But the markets aren’t buying it with the Sensex losing 300 points or 1.63%. Neither are the common people, hundreds of whom flooded the streets of the capital yesterday to protest against skyrocketing food prices.