Inflation moves up to 4.13%

Driven by higher prices of maize, fruits and vegetables, ochre, iron ore and cement, the wholesale price index (WPI) rose to 4.13 per cent for the week ended June 23, 2007, higher than the previous week's 4.03 per cent. The rate was 4.84 per cent during the corresponding week of the previous year.

Among the food articles, spices and condiments, poultry chicken, ragi and bajra became cheaper. In the mineral group, prices of ochre rose 25 per cent and of fire clay at 24 per cent. Iron ore prices were up by 10 per cent and phosphorite by 4 per cent. Prices of flourites fell by 39 per cent, magnesite by 36 per cent and chromite prices by 4 per cent.

Despite crude oil prices touching the $70 per barrel mark, the index of fuel, power, light and lubricants segment remained unchanged.

Cement and chewing tobacco became dearer by 1 per cent, lead ingot by 4 per cent and map litho paper by 2 per cent. Among manufactured items, prices of dairy products, oil cakes and groundnut oil became dearer. However, there was no change in the fuel, power, light and lubricant basket.

Finance Minister P Chidambaram said the central bank's monetary tightening and currency strength had helped moderate inflation and more rate rises might not be needed if the trend continued.

Inflation, at 4.13 per cent, is well below Reserve Bank's tolerance level of 4-4.5 per cent for the current fiscal. The central bank has raised interest rates five times in the past year, with the last hike in the end of March.

Planning Commission Deputy Chairman Montek Singh Ahluwalia said the inflation rate had entered a "comfort zone" and was expected to go down further.

The annual inflation for the week ended April 28, 2007, was revised upwards to 6.01 per cent from the 5.66 per cent as reported earlier. The WPI stood at 212.0 points in the week ended June 23.