Inflation starts upward journey, rises to 7.38 per cent

Just when it looked that the government has finally got a grip on inflationary pressure by pulling it back from the 8 per cent mark, inflati...

Just when it looked that the government has finally got a grip on inflationary pressure by pulling it back from the 8 per cent mark, inflation rose by 0.28 per cent to 7.38 per cent for the week ended October 23. The rise in inflation was mainly due to costlier vegetables, fuels and certain manufactured products.

However, the government’s headache is just beginning. After one of the steepest hikes in the prices of petrol, diesel and LPG on Thursday, the spiralling effect of the hike on inflation will surely be felt in a couple of weeks. In fact, market analysts believe RBI’s rather modest inflation forecast of 6.5 per cent could again be revised upwards on account of the steep hike in petroleum products prices.

In the week under review, the Wholesale Price Index (WPI) was up by 0.3 per cent to 189.1 points due to an all-round price hike for main commodities — primary articles, fuels and manufactured products, including edible oils. The index was 176.1 points in the year-ago period.

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During the week under review, global oil prices vaulted to record new highs nearing $56 a barrel due to winter demand in the northern hemisphere and China as well as the US Presidential elections.

The index of primary articles’ group rose by 0.7 per cent to 191.8 points due to costlier food and non-food articles. The index was 182.8 points in the year-ago period. Food articles’ group index rose by 0.5 per cent to 190 points due to higher prices for vegetables and eggs, poultry chicken, jowar and moong and barley.