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Inflation Clock Set To Strike 12
Posted by Pradeep Sadanapalli | July 4, 2008 | 347 views
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Loading ...Inflation will continue to move up further this week and may even touch the 12%-mark on the back of rising prices of edible oil, food products, fruits and vegetables and iron and steel. The inflation figures, to be announced on Friday, will reflect the wholesale price index for the week ended June 21.
Prices of oil, both regulated and deregulated, is expected to remain stable in the week under consideration. In the previous week (ended June 14), inflation reached a 13-year high of 11.42%.
Speaking to ET, government sources said that food articles in the manufacturing sector including edible oil, tea and salt had gone up considerably during the week. In the previous week, too, prices for the category increased by 14%. “This week, prices in the food product category is set to rise further,” an official said. Senior finance ministry officials had said earlier that inflation rates could even go up to 13% before it starts declining.
Iron and steel is another sector which is set to see a price rise. In the previous week, reporting of fresh prices for steel by the ministry resulted in prices going up by over 30%. Vegetables and fruits, too, would contribute to the rising price index. The higher MSP for wheat and rice announced this year compared to the previous year would continue to fuel inflation. “Prices of rice and wheat have contributed to inflation in the past few weeks and would continue to do so,” the source said.
Prices of oil, however, have remained stable in the week under consideration. While prices of regulated oil including petrol and LPG would remain stable in the coming weeks as well till another price hike is announced, the index for non-regulated oil is likely to go up in the coming week. “The hike in the prices of ATF announced recently is likely to get reflected in next week’s index,” sources said.
A high base effect will also contribute to higher inflation. Last year, inflation was low during this period and had dipped to about 3.07% for the week ending October 13, 2007. Double digit inflation is expected to continue over the next few months. The WPI is calculated point-topoint which means that it compares the prices prevailing in the week under consideration with the prices in the comparable week of the previous fiscal.
SOURCES:
Economic Times
Topics: Public Concerns, Consumer Market, Govt Failures |
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