New
Delhi: Annual inflation eased below 5.5 per cent after
nearly four months of firefighting by the central government.
This
represents the third consecutive weekly fall in inflation.
The
wholesale price index (WPI) based inflation declined to
5.44 per cent for the week ended May 5, down from 5.66
per cent the previous week.
This
decline is mainly attributed to the base effect, rather
than an actual easing of prices of the three commodity
groups - primary articles, fuel and power, and manufactured
products - that comprise the WPI.
Fears
are rising that the central bank may tighten interest
rates again because prices of major commodities have risen,
implying that recent monetary and fiscal measures have
not yielded immediate results.
Economists
said prices of vegetable prices, fruits, cement prices,
edible oil prices- the major contributors, were still
at high levels.
An
economist said he was expecting a 25 basis point hike
in the repo rate in the next policy review.
The
RBI had increased the cash reserve ratio by 25 basis points
each on six occasions from December 23 last, with the
latest hike coming into effect on April 28.
The
index for primary articles increased by 0.4 per cent,
with prices of eggs (8 per cent), fish-marine (5 per cent),
masur (4 per cent) and fruits and vegetables (3 per cent)
increasing.
Prices
of condiments and spices, moong (2 per cent) and barley
(1 per cent) declined. In the non-food articles category,
prices of niger seed (5 per cent), sunflower (3 per cent),
and raw cotton (2 per cent) declined.
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