Inflation rate rises to 4.41 percent for the week ended July 14, 2007
Higher food prices pushed up the inflation rate to 4.41 per cent, but analysts expect the Reserve Bank not to raise key rates when it reviews the monetary policy on July 31. The inflation rate based on wholesale prices index, the key measure of cost of living, is still within the central bank’s medium-term target of 4-4.5 per cent and annual target of 5 per cent for this fiscal.
Vegetables costlier
Among the primary articles, prices of vegetables rose sharply by 7 per cent during the week, while those of cereals rose by 0.9 per cent.Though inflation figures will have a bearing on the measures to be announced by the RBI to regulate money supply, analysts said inflation is within control and there was little chance of the banking regulator going for a rate hike. Finance Minister P Chidambaram had indicated last week that high crude oil and food prices did not necessarily mean that monetary policy would be tightened further. However, the ever rising cost of vegetables may be a cause of concern for the government. Vegetable prices soared seven per cent for the week ended July 14 registering the highest increase among all items. Last week too prices of vegetables had gone up by 4.4 per cent. WPI, on which inflation data is based, rose by 0.1 per cent to 212.9 per cent during the week compared to 212.6 per cent in the previous week.Prices of some food items, however, came down marginally. Fish-marine became cheaper by two per cent while urad prices declined by one per cent pulling down the overall price of pulses by 0.3 per cent during the week. In the non-food articles category, prices of fibre rose by 2.2 per cent.
Manufactured products
Among manufactured products, rates of rice and bran oil rose by three per cent each, while imported edible oil, groundnut oil, cottonseed oil and oil cakes became costlier by one percentage point each. However, the prices of sugar, jaggery and gingelly oil declined by one per cent. Prices of fruits fell by 0.9 per cent. Egg, meat and fish also became cheaper by 0.5 per cent each. Index of paper and paper products group rose by 0.1 per cent to 192.8 points from 192.7 points last week due to marginal rise in the prices of printing paper white.Inflation numbers for the week ended May 19 was revised to 5.30 per cent compared to the provisional figure of 5.06 per cent. This was done as WPI for the week stood at 212.4 points against the provisional figure of 211.9.
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