Inflation In India Jumps To 18.32%

Soaring onion and other vegetables’ prices led to a sharp rise in inflation at 18.32% for the week ended December 25, a development that may prompt the Reserve Bank to tighten monetary policy to check further escalation in commodity costs. Food inflation jumped up by 3.88 percentage points from 14.44% recorded in the previous reporting week, and edged closer to the high level of 19.90%, last witnessed a year ago.

The rise in food inflation has been mainly on account of 58.58% rise in prices of vegetables in the wholesale market. Among the individual items, onion became dearer by 82.47% on annual basis, while egg, meat and fish became costlier by 20.83%, fruits by 19.99% and milk by 19.59%.

The data further reveals that onion prices during the one week period ending December 25, rose by 23.01% in the wholesale market.

Inflation In India Jumps To 18.32%

Inflation In India Jumps To 18.32%

With food inflation accelerating, RBI may take more measures in its forthcoming quarterly review of the monetary policy on January 25. The central bank during 2010 had raised short-term key policy rates six times to tame inflation. Meanwhile, in the non-food category, the prices of fibres and minerals have climbed by 35.53% and 30.58%, respectively. Rising food prices will reflect on the monthly inflation data for December, scheduled for announcement on January 14. The overall inflation in November had come down to 7.75% from 8.58% a month ago. – HT

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