New Delhi, January 6 (Agencies): High prices of food items, especially onions, led to a sharp spike in India’s annual food inflation to 18.32% for the week ended Dec 25, compared to 14.44% the week before. The fifth straight week of rise in food inflation rate, based on wholesale prices, was pushed back to double digits in the second week of December, according to weekly data released by the commerce and industry ministry Thursday.
The rise in onion prices, due to a crop failure in the main growing regions, and a consistent rise in rates of other essential commodities like vegetables, poultry, milk and fruits have again raised the chances of a rate hike by the Reserve Bank of India (RBI) in January. According to Thursday’s data, the 52-week inflation rate for non-food articles rose to 22.4% for the week ended Dec 25 compared to 21.24% in the previous week. The inflation rate for primary articles increased to a whopping 20.2% during the week under review, against a rise of 13.25% the previous week.
The index for fuels rose to 11.63% for the week ended Dec 25, compared to 10.67% in the previous week. The government has expressed concern over the high price line and assured people that the annual inflation rate will fall to around 5% by the end of this fiscal. An empowered group of ministers on prices headed by Finance Minister Pranab Mukherjee extended the ban on export of pulses indefinitely, and decide to release additional 5 million tonnes of wheat and rice to be sold through state-run fair price shops.
Earlier, the central bank, in its mid-quarter review of its monetary policy, kept almost all rates intact, but lowered the amount banks have to retain in the form of bonds, gold and cash to ease liquidity in the system. The move indicated that the RBI was expecting the inflation rate to temper and wanted to make more credit available to industry to ensure that growth does not suffer for want of funds. But with inflation back in double-digit, the RBI will most likely look to do all that it can on the monetary policy front.
The rise in onion prices, due to a crop failure in the main growing regions, and a consistent rise in rates of other essential commodities like vegetables, poultry, milk and fruits have again raised the chances of a rate hike by the Reserve Bank of India (RBI) in January. According to Thursday’s data, the 52-week inflation rate for non-food articles rose to 22.4% for the week ended Dec 25 compared to 21.24% in the previous week. The inflation rate for primary articles increased to a whopping 20.2% during the week under review, against a rise of 13.25% the previous week.
The index for fuels rose to 11.63% for the week ended Dec 25, compared to 10.67% in the previous week. The government has expressed concern over the high price line and assured people that the annual inflation rate will fall to around 5% by the end of this fiscal. An empowered group of ministers on prices headed by Finance Minister Pranab Mukherjee extended the ban on export of pulses indefinitely, and decide to release additional 5 million tonnes of wheat and rice to be sold through state-run fair price shops.
Earlier, the central bank, in its mid-quarter review of its monetary policy, kept almost all rates intact, but lowered the amount banks have to retain in the form of bonds, gold and cash to ease liquidity in the system. The move indicated that the RBI was expecting the inflation rate to temper and wanted to make more credit available to industry to ensure that growth does not suffer for want of funds. But with inflation back in double-digit, the RBI will most likely look to do all that it can on the monetary policy front.
Rising food inflation a concern: Pranab
New Delhi, January 6 (PTI): Finance Minister Pranab Mukherjee on Thursday said that food inflation at 18.32% for the week ended December 25, remained an area of concern. “It has moved further. It is an area of concern,” the finance minister told reporters after the government’s weekly data showed that the food inflation kept climbing for the fifth straight week. The weekly inflation figure is the highest during the past one year.
Soaring onion and other vegetables’ prices led to the sharp rise in inflation at 18.32% for the week that ended on Christmas, up from 14.44% recorded in the previous week. However, Mukherjee added these were weekly variations and figure for December month was yet to come before a final assessment could be made. “These are weekly (figures). Let us wait for monthly figures. These are weekly variations, but is a matter of concern,” he added.
The overall inflation in November was 7.48%, from 8.58% a month ago. During the week prices of vegetables rose by 58.58% in the wholesale market. Among the individual items, onion became dearer by 82.47% on annual basis, while egg, meat and fish became costlier by 20.83%, fruits by 19.99% and milk by 19.59%.
Soaring onion and other vegetables’ prices led to the sharp rise in inflation at 18.32% for the week that ended on Christmas, up from 14.44% recorded in the previous week. However, Mukherjee added these were weekly variations and figure for December month was yet to come before a final assessment could be made. “These are weekly (figures). Let us wait for monthly figures. These are weekly variations, but is a matter of concern,” he added.
The overall inflation in November was 7.48%, from 8.58% a month ago. During the week prices of vegetables rose by 58.58% in the wholesale market. Among the individual items, onion became dearer by 82.47% on annual basis, while egg, meat and fish became costlier by 20.83%, fruits by 19.99% and milk by 19.59%.
