Fuel prices propel inflation to 7.76%

Higher fuel prices drove up the wholesale price index-based inflation to 7.76 per cent for the week ending November 6. Inflation, which was 7.06 per cent in the previous week, rose despite a fall in prices of primary articles and manufactured products.

"Next week, the inflation level should be a little below the current level. About 7.6 per cent is likely, because prices of other commodities are not rising. In the week after that, the roll back will result in a marginal reduction in inflation to about 7.2 per cent. However, the base effect of last year's inflation may push the figure to about 7.9 per cent by the end of November," said Saumitra Chaudhuri, Economic Advisor, ICRA.

The year 2004 should close with an inflation level of about 7.4 per cent and if prices remain under control, inflation should be at about 6.2 per cent at the end of the fiscal, he added.

Inflation was 5.18 per cent in the corresponding week last year. The inflation level based on the final index for the week ended September 11 was 8.15 per cent as against 7.87 per cent reported earlier on the basis of the provisional index.

The inflation rate based on the Consumer Price Index (CPI) for agricultural labourers (AL) rose to 3.6 per cent in October 2004 as against 3.42 per cent in October 2003 and 3.31 per cent in September 2004.

Inflation for rural labourers (RL) rose to 3.58 per cent in October 2004 as against 3.4 per cent in October 2003. The figure was 3.29 per cent in September 2004. CPI-AL and CPI-RL seek to measure the rate of inflation in the countryside. Both indices use 1986-87 as the base year.