Inflation breaches 12% mark

-

Price worries

Primary articles, including fruits, milk, spices, and eggs, meat and fish led the surge

In manufactured products, iron and steel and edible oil were the major contributors

Our Bureau

New Delhi, Aug. 7 Annual inflation, measured by the Wholesale Price Index, accelerated to 12.01 in the week ended July 26, the highest since April 1, 1995 and marginally above the 11.98 per cent annual increase in the previous reported week.

The surge in inflation was on account of surging primary articles, including fruits, milk, spices, and eggs, meat and fish, as well as mineral oils and iron and steel groups, official data released on Thursday showed.

The rise came a week after the Reserve Bank of India hiked its key short-term lending rate by a higher-than-expected half-a-percentage point and also raised the percentage of cash commercial banks must park with it in a bid to subdue spiralling inflation and curtail credit growth. The RBI has said it hopes to bring down inflation to seven per cent by the end of the current financial year.

During the latest reported week, inflation in primary articles rose 10.32 per cent on a year-on-year basis, with fruits (12 per cent), spices (13 per cent), eggs, meat and fish (7 per cent) and milk (8 per cent) among the major contributors. Inflation in manufactured products also moved up further to 10.75 per cent, with edible oils going up 17 per cent, malt liquor (10 per cent), and iron and steel (35 per cent), while inflation in the fuels group was up 17.11 per cent due to a 26.99 per cent rise in the mineral oils group.

'News for comfort'

Commenting on the latest inflation numbers, the country's Chief Statistician, Dr Pronab Sen, said that headline inflation had flattened out. "This is news for comfort... Prices have flattened," he told reporters on the sidelines of a function. Dr Sen said cement and steel prices, which were the main drivers of inflation, have stabilised.

"The prices of these commodities would not have shown such a sharp rise, if we had the entire gamut of commodities in the index," he said. He said that restructuring of WPI, which is in the works, will not change the bigger picture.

He lauded the efforts of the RBI to rein in inflation, but warned that the Government should ensure high interest rates do not hamper growth. "The Government has to walk a tightrope. It has to see that it does not push industry to the brink," he said.

Meanwhile, continuing a trend of sharp upward revisions, final inflation for the week ended April 12 was revised up to 7.95 per cent from the provisional estimate of 7.33 per cent

Popular posts from this blog

IOB capitalises on hike in stake by LIC

-
Indian Overseas Bank rose 1.53% to Rs 46.45 at 10:31 IST on BSE, after the biggest domestic instutional investors Life Insurance Corporation of India hiked its stake in the state-run bank. The bank made this announcement after trading hours on Wednesday, 25 March 2009. Meanwhile, the BSE Sensex was up 126.19 points, or 1.31%, to 9,794.09. On BSE, 31,003 shares were traded in the counter. The stock had an average daily volume of 1.93 lakh shares in the past one quarter. The stock hit a high of Rs 47 and a low of Rs 45.95 so far during the day. The stock hit a 52-week high of Rs 156.80 on 2 May 2008 and a 52-week low of Rs 37.55 on 9 March 2009. The mid-cap bank stock had underperformed the market over the past one month till 25 March 2009, falling 3.17% as compared to the Sensex's 8.60% rise. It had also underperformed the market in the past one quarter, declining 33.94% as compared to the Sensex's 1.04% rise. The bank's current equ The current price of ...
Read more

Lok Housing & Constructions builds on fund raising plans

-
Lok Housing & Constructions jumped 6.99% to Rs 107.90 at 11:20 IST on BSE ahead of a board meeting to consider fund raising options from both foreign and local market, including an institutional placement. Meanwhile, the BSE Sensex was down 50.50 points, or 0.30%, at 15203.73. On BSE, 1.86 lakh shares were traded in the counter. The scrip had an average daily volume of 4.74 lakh shares in the past one quarter. The stock hit a high of Rs 115 and a low of Rs 102 so far during the day. The stock had a 52-week high of Rs 390.50 on 1 January 2008 and a 52-week low of Rs 96.25 on 12 June 2008. The scrip had underperformed the market over the past one month till 12 June 2008, falling 26.55% compared to the Sensex's 10.18% decline. It had also underperformed the market in the past one quarter, falling 31.39% compared to Sensex's 3.24% fall. The small-cap housing projects developer has an equity capital of Rs 42.88 crore. Face value per share is Rs 10. The current...
Read more

economic times picks

-
CMP: Rs 70.50 Target Price: Rs 90 CLSA Asia-Pacific Markets maintains an 'outperform' on Jagran Prakashan, with a 12-month price target of Rs 90. "An economic slowdown notwithstanding, improving literacy and income levels in Hindi heartland imply that drivers for Jagran's growth are still in place. With a 35% ad rate hike in 2008, Jagran continues to narrow the gap with its more expensive English rivals," the foreign brokerage said in a client note, after a Q&A reply from the management. "Rising newsprint prices have made Jagran cautious on launching new editions in FY09 and its focus this year will be profitability. While management has budgeted for a minor increase in FY10 newsprint prices, it believes that prices are likely to peak in Q2FY08 and decline thereon," it added. Neyveli Lignite CMP: Rs 117.15 Target Price: Rs 160 MERRILL Lynch has maintained its 'neutral' rating on Neyveli Lignite, with a price target of Rs 160 ...
Read more