The wholesale price index based annual rate of inflation rate stood at 12.14 per cent for the week ended September 6, 2008, as against 3.46 per cent a year ago.
Inflation had stood at 12.10 per cent a week earlier, the third week of a fall in rate of price increase.
Food articles increased to 11.27 per cent as compared to 10.07 per cent in the week ended August 30, 2008. However, the price index of other two categories- fuel and power, and manufactured products- declined to 16.66 per cent and 10.78 per cent respectively for the week ended September 6, 2008.
“Inflation rate will keep fluctuating around 12 per cent. We will see the (inflation) index coming down in the next few weeks because of sharp fall in price of industrial fuels like ATF (aviation turbine fuel) and furnace oil”, said D K Joshi, economist with Crisil, a rating and consulting firm.
International crude prices has fallen sharply in recent weeks to around $92 a barrel from a record high of $147 a barrel in July this year.
Inflation of 30 essential commodities, which is closely monitored by the government, increased by 30 basis points to 7.72 per cent for the week ended August 30, 2008. Increase in prices of rice, wheat, moong, masur, gram, urud, potatoes and salt contributed to the increase, said a press statement issued by the finance ministry.
The ministry has released a new number called, ‘average 52-week inflation’ for the last three years. It said the average inflation rate for all commodities stood at 7.30 for the one-year ended September 6, 2008.
Also Read
With the economic growth slowing down, Joshi said the central bank might go in for another round of monetary tightening, adding that inflation is still way above Reserve Bank of India’s (RBI's) comfortable rate of around 5 per cent.
China, the other fast growing economy, reduced the key interest rates last week to encourage growth. But their inflation is contained and is hovering around 6 per cent, said Joshi.