India: Inflation touches new high of 11.91% The annual inflation rate climbed to 11.91 per cent for the first time in more than 13 years in early July, driven by higher costs of commodities and strong demand in the economy. This is a quarter per cent jump week on week. ( Watch )
The fuel, power and light were up 0.9 per cent while primary articles were down 0.1 per cent. Fruit and vegetable prices were down 1 per cent with other food articles seeing a 0.2 per cent dip.
It would be the 22nd consecutive week that the inflation rate has been above 5.5 per cent, the central bank's target for the end of the fiscal year in March 2009.
According to a research report by Standard & Poor's, world CPI inflation - which was 2.4 per cent in 2002 - rose to 3.3 per cent in 2007 and is now projected to hover around 5.2 per cent in 2008.
Region-wise, CPI inflation is projected to remain 3.4 per cent this year in European Union and 3.2 per cent in Eurozone. In 2002, the inflation figures were 2.1 per cent for both the regions.
Likewise, CPI inflation is projected to remain this year at 4.8 and 3.2 per cent in the US and the UK, respectively, and 8.8 per cent in the emerging markets. The highest inflation is projected at 15.3 per cent in the CIS counties and at 12.8 per cent in the Middle East & North Africa.
In India, too, there seems to be no respite in sight with the WPI inflation projected to remain in double-digit territory until May 2009.
Global investment banker Barclays Capital, for instance, has already projected that inflation may surge to 17 per cent by September on the back of another round of hike in fuel prices in or around the same month.
"We believe WPI inflation will remain in double-digit territory until May 2009. We expect WPI inflation of 17 per cent by September 2008," the bank said in a report.
For the week-ended June 28, wholesale prices-based inflation touched a new 13-year high of 11.89 per cent, much higher than the RBI tolerance limit of 5.5 per cent for the current fiscal.
According to the report, the government is likely to hike fuel prices between 10 and 20 per cent again as early as September to limit fiscal risks.
Rise in the prices of the Indian crude oil basket could be the trigger for another round of increase in fuel prices to $145-150 per barrel from the current $132 per barrel.
The government last revised retail petroleum prices with effect from June 5, when petrol prices was increased by Rs 5 a litre, diesel by Rs 3 per litre and cooking gas by Rs 50 per cylinder. This resulted in inflation touching a double digit figure of 11.05 per cent for the week ended June 7.
According to a report, the Reserve Bank of India Governor Yaga Venugopal Reddy, recently told a parliament committee the situation on the price front was unlikely to improve dramatically anytime soon. http://www.nowpublic.com/tech-biz/india-inflation-touches-new-high-11-91 |