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Inflation overshoots RBI target, at 8.98 pc

News18

Updated: April 15, 2011, 2:44 PM IST
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Inflation overshoots RBI target, at 8.98 pc
The overall inflation measured on the basis of Wholesale Price Index was 8.31 per cent in February.

New Delhi: High prices of vegetables and manufactured items drove the headline inflation in March to 8.98 per cent, way above the RBI's expectation of 8 per cent.

The overall inflation measured on the basis of Wholesale Price Index (WPI) was 8.31 per cent in February.

The rise in overall inflation for the second month in a row may prompt the central bank to go for another round of policy rate hikes in its policy review meeting, scheduled for May 3.

As per the official data released on Friday, the high inflation was on account of rising prices of manufactured items, milk, vegetable and fruits. In addition, high fuel costs due to spiralling international crude oil prices also contributed to the phenomenon.

Besides, food inflation, which accounts for nearly 15 per cent of overall WPI inflation, stood at 8.28 per cent for the week ended April 2.

The prices of primary articles -- food, non-food articles and minerals -- shot up by 12.96 per cent on an annual basis, according to the official data released on Friday.

Food articles grew expensive by 9.47 per cent, cereals by 3.96 per cent and, rice and wheat by 2.69 per cent and 0.75 per cent, respectively.

However, the speed at which pulses price rose eased to 4.17 per cent on an annual basis.

During the month, fuel and power prices went up by 12.92 per cent, driven mainly by a 23.14 per cent rise in petrol prices and a 14.99 per cent jump in cooking gas (LPG) rates.

At the same time, the manufactured goods group index rose by 6.21 per cent on an annual basis. Manufactured items have the highest weight of 64.9 per cent in the WPI.

The WPI inflation for January was revised upwards to 9.35 per cent from the provisional estimates of 8.23 per cent.

First Published: April 15, 2011, 2:44 PM IST
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