labels: economy - general
Inflation rate dips marginally to 4.36 per centnews
03 August 2007

Mumbai: The annual rate of inflation based on the wholesale price index (WPI) declined marginally to 4.36 per cent during the week ended July 21 from 4.41 per cent in the previous week.

Inflation rate edged lower on the back of a general fall in food items like pulses and fruits despite a rise in the prices of vegetables and some other food items. Prices of most manufactured goods and lubricants also rose during the week under review.

Vegetables were dearer by 2.3 per cent. Prices of food items in manufactured category like coffee powder rose by seven per cent, coconut oil, imported edible oil, oil cakes and groundnut oil by two per cent each and khandsari and cotton seed oil by one per cent each.

Food items like eggs, meat and fish were less expensive by 1.8 per cent, fruits by 0.6 per cent and pulses by 0.4 per cent.

The inflation rate had stood at 4.72 per cent during the corresponding period of the previous year.

This is the first official inflation data after the Reserve Bank raised the cash reserve ratio (CRR) of banks by 0.5 per cent in its quarterly review of monetary policy. The central bank, however, held interest rates steady.

Inflation levels have so far been well within the RBI`s five per cent ceiling for the current fiscal and even its projection of 4-4.5 per cent in the `medium term`.

It was the first fall in the weekly inflation rate since June 16, when it dropped to a 14-month low of 4.03 per cent.

RBI had, in its quarterly monetary policy review, noted that international crude prices had risen beyond $70 a barrel and were extremely volatile, which posed a serious risk to inflation expectations.

Analysts expect higher crude oil prices, hovering around $77 a barrel, to force government to raise administered prices for petrol and diesel, pushing inflation higher.


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Inflation rate dips marginally to 4.36 per cent