New Delhi: Driven by higher prices of essential food articles, jet fuel and alcohol, inflation inched up further for the second consecutive week, to 5.64 per cent for the week ended January 17. Inflation was higher by 0.04 per cent from 5.60 per cent a week before. Food items that became expensive during the week as a result of the eight-day truckers’ strike include maize, bajra, jowar, rice, sugar and gur.

The truckers’ strike, which ended on January 12, restricted the movement of goods, leading to shortage and price rise.

“It’s an aberration and next week also we might see a little surge due to the spillover effect of the truckers’ strike. But the trend is downward and it (inflation) will fall in the days ahead,” HDFC Bank chief economist Abheek Barua said.

The RBI in its third quarterly review of monetary policy lowered inflation estimates to 3 per cent by March end.

The government decision to cut petroleum prices from Thursday is expected to bring down inflation substantially in the coming weeks.

Petrol prices were slashed by Rs 5 a litre and those of diesel by Rs 2 per litre, while the domestic LPG rate was brought down by as much as Rs 25 per cylinder.

According to Minister of State for Finance P K Bansal, the cut in petroleum prices will bring down inflation by more than one percentage point.

During the week under review, prices of beer and spirits became dearer as much as 25 per cent.

In the fuel goods category, jet fuel and furnace oil became dearer by 4 per cent and one per cent, respectively.

Among manufactured items, caustic soda, zinc and sacking bags became expensive during the week.

While the prices of fruit and vegetables remained unchanged during the week, gram and spices were cheaper by one per cent.

At the same time, prices of raw rubber, mustard seed and sunflower slipped by one per cent each.

However, minerals like limestone became expensive by as much as 52 per cent and magnesite by 34 per cent.

Among manufactured items, prices of oil cakes went up by five per cent, sacking-bags by three per cent, caustic soda by three per cent, zinc by 10 per cent and soft drink by one per cent.

However, cement and iron and steel prices softened marginally during the week.

Steel ingots were cheaper by 6 per cent, unrefined oil by 7 per cent, imported edible oil by 5 per cent and groundnut oil by one per cent.

Boilers and accessories were cheaper by 8 per cent, electric motors by two per cent, automobile cable by four per cent and automobile spare parts by two per cent.

Inflation, which declined for ten consecutive weeks till January 3, has been rising marginally since then.

Given the RBI projection of inflation touching three per cent by March end, analysts believe that the central bank may further cut benchmark interest rates in the coming month.

“I expect the RBI to slash the repo and reverse repo rates by 50 basis points in the next month,” Barua said.

Inflation for the week ended November 22 was revised downwards to 8.26 per cent from 8.40 per cent in the provisional estimates.

source: Dnaindia

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