Inflation rises to 6.95 percent in February

Inflation rises to 6.95 percent in February

By: || Updated: 14 Mar 2012 06:35 AM


New Delhi: Reversing a four-month old declining trend, India's
inflation rose to 6.95 percent in February on a sharp increase in prices
of food articles, government data released Wednesday showed.

The
monthly inflation based on wholesale price index was 6.55 percent in
January. The headline inflation has risen for the first time in five
months. Food inflation accelerated to 6.07 percent in February after
remaining negative or near zero for the last two-three months. Food
inflation was at 0.79 percent in December 2011 and (-) 0.52 percent in
January.

The build up inflation in the financial year so far was
5.95 percent compared to a build up of 8.66 percent in the corresponding
period of the previous year, according to the ministry of commerce and
industry data. The headline inflation was recorded at 9.54 percent in
February 2011. Reacting on the monthly data, Finance Minister Pranab
Mukherjee said the increase showed that inflationary pressure continued in
the economy.

However, he expressed hope that inflation would come
down to 6.5 percent by March-end. The March inflation figure will be
available in April. "I do hope if this trend continues then we will end
the year with around 6.5 per cent," Mukherjee told reporters here. The
rise in inflationary pressure has made it difficult for the Reserve Bank
of India (RBI) to cut rates in its monetary policy review on Thursday.

"At
a time when industry is already reeling under the impact of an investment
led slowdown caused by tightening monetary policy of the RBI and with
manufacturing sector growing at a modest 4.4 percent during April-January
2011-12, the upturn in inflation spells bad news for industry," said
Chandrajit Banerjee, director general, Confederation of Indian Industry
(CII). Inflation in manufactured products rose to 5.75 percent in February
while in overall primary articles segment it grew to 6.28 percent.




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