Inflation at minus 1.53%, food prices still rising
The Financial Express, August 21, 2009, Page 2
fe Bureaus, New Delhi
Inflation rose marginally to (-) 1.53% for the week ended August 8 from (-) 1.74 in the previous week, even as food prices continued to rise amid an erratic and deficient monsoon. The food articles index surged 10.5% compared with a year ago as a weak monsoon hit crops. It was the second week in a row that the food price index saw growth of at least 10%.
Economists expect wholesale price index based inflation to rise sharply in the coming months. Inflation is expected to turn positive after September and reach 7-7.5% by the year end, HDFC Bank economist Jyotinder Kaur said. The WPI inflation was at 12.82% during the corresponding week of the previous year. Consumer price index-based inflation stood at 9.29% in June.
The government on Thursday raised the minimum support prices for paddy by Rs 100 a quintal and pulses by up to Rs 300 a quintal. This is expected to make pulses and cereals more expensive. Essential items like fruits turned expensive by 2.6%, bajra and urad by 2% each, and condiments, spices and arhar by 1% each. Khandsari and rice bran oil were expensive by 3% each, while imported edible oil, sooji and cotton seed oil were up by 2% each, and maida, ghee and oil cakes by 1% each.
If one looks at year-on-year comparison, prices of food items rose much more exorbitantly. For example, prices of vegetables rose by 40%, cereals 11.6%, pulses 17.6%, condiments and spice by 4.7%. Analysts say the government action is now needed to tame rising food prices caused by insufficient rainfall as monetary policy cannot tackle supply-side bottlenecks.
“We still feel food inflation is the biggest risk and we expect a quite proactive fiscal policy by the government to manage this, but we don’t expect too much of a monetary policy to fight this supply-side inflation,” Anand Rathi Financial Services wrote. At its monetary policy review last month, the Reserve Bank of India revised up its inflation outlook for 2009-10 to 5% from 4%.
The inflation rate based on the consumer price index (CPI) rose sharply in July 2009, according to the data released by labour ministry on Thursday. Inflation based on the CPI-AL (agricultural labourers) increased to 12.90% in July from 11.52% in June. Inflation based on the CPI-RL (rural labourers) increased to 12.67% in July from 11.26% in June.
The Financial Express, August 21, 2009, Page 2
fe Bureaus, New Delhi
Inflation rose marginally to (-) 1.53% for the week ended August 8 from (-) 1.74 in the previous week, even as food prices continued to rise amid an erratic and deficient monsoon. The food articles index surged 10.5% compared with a year ago as a weak monsoon hit crops. It was the second week in a row that the food price index saw growth of at least 10%.
Economists expect wholesale price index based inflation to rise sharply in the coming months. Inflation is expected to turn positive after September and reach 7-7.5% by the year end, HDFC Bank economist Jyotinder Kaur said. The WPI inflation was at 12.82% during the corresponding week of the previous year. Consumer price index-based inflation stood at 9.29% in June.
The government on Thursday raised the minimum support prices for paddy by Rs 100 a quintal and pulses by up to Rs 300 a quintal. This is expected to make pulses and cereals more expensive. Essential items like fruits turned expensive by 2.6%, bajra and urad by 2% each, and condiments, spices and arhar by 1% each. Khandsari and rice bran oil were expensive by 3% each, while imported edible oil, sooji and cotton seed oil were up by 2% each, and maida, ghee and oil cakes by 1% each.
If one looks at year-on-year comparison, prices of food items rose much more exorbitantly. For example, prices of vegetables rose by 40%, cereals 11.6%, pulses 17.6%, condiments and spice by 4.7%. Analysts say the government action is now needed to tame rising food prices caused by insufficient rainfall as monetary policy cannot tackle supply-side bottlenecks.
“We still feel food inflation is the biggest risk and we expect a quite proactive fiscal policy by the government to manage this, but we don’t expect too much of a monetary policy to fight this supply-side inflation,” Anand Rathi Financial Services wrote. At its monetary policy review last month, the Reserve Bank of India revised up its inflation outlook for 2009-10 to 5% from 4%.
The inflation rate based on the consumer price index (CPI) rose sharply in July 2009, according to the data released by labour ministry on Thursday. Inflation based on the CPI-AL (agricultural labourers) increased to 12.90% in July from 11.52% in June. Inflation based on the CPI-RL (rural labourers) increased to 12.67% in July from 11.26% in June.
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