Inflation holds at 12.14 per cent, Other Biz Headlines

Inflation holds at 12.14 per cent

NEW DELHI: Inflation was reported at 12.14 per cent for the week ended September 13, at the same level recorded a week earlier. While food articles rose by 0.2 per cent, chemical & chemical products were up by 0.1 per cent, and fruit & vegetables by 0.6 per cent. Manufacturing products, however, were down by 0.5 per cent, while fuel, power and light remained unchanged. Economists see inflation stabilising around this level before it starts to fall. However, they expect the RBI to raise interest rates by 25-50 basis point in its October review. Earlier, a Reuters poll on Wednesday estimated the annual inflation rate to head upwards for a second consecutive week with the rise mainly seen in food and vegetables. The wholesale price index was forecast to have risen 12.23 per cent in the 12 months to September 13, above the previous week’s rise of 12.14 per cent, according to the median estimate.

Shubhada Rao, chief economist with Yes Bank, said there was upward pressure on prices of primary articles, especially those of food and vegetables. In early August, the inflation rate was 12.63 per cent, the highest reading since annual numbers in the current data series became available in April 1995. RBI governor Duvvuri Subbarao said early this month that inflation was showing signs of moderating but it was too early to conclude whether this was a trend, signalling he would wait and see before taking any fresh steps. This is the 25th consecutive week that inflation is above the RBI’s 7.0 per cent target by the end of March. The government had earlier said inflation would hit 13 per cent and thereafter start moderating from December, before settling at 8.0-9.0 percent by the end of the fiscal year in March.
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Source:ET