Inflation up at 5.64%, sub-5% levels seen soon
The official wholesale-priced-based inflation rate inched up from 5.6 per cent to 5.64 per cent in the week ended January 17, government data revealed on Thursday.business Updated: Jan 30, 2009 10:44 IST
Hit by the truckers strike and a rise in the price of manufactured goods, the official wholesale-priced-based inflation rate inched up from 5.6 per cent to 5.64 per cent in the week ended January 17, government data revealed on Thursday. But experts believe it is just a month away from dipping below 5 per cent after hitting 12 per cent last August.
The fuel price cut announced by the government on Wednesday may have a significant impact on the inflation numbers within a fortnight.
“The fuel price cut will bring down transport costs and I expect the inflation to come between 4-5 per cent by March which was the target set,” said Suresh Tendulkar, chairman, Prime Ministers’ economic advisory council.
Experts are of the opinion that the rise in the mild inflation was an aberration and is a result of the truckers strike and inflation should come down within the next one month.
“The cut in fuel prices should have a combined (direct and indirect) impact of 60-80 basis points on inflation,” said Abheek Barua, chief economist, HDFC bank. “It should be easily below 5 per cent by February-end.” One hundred basis points equals one percentage point.
Industry chamber Ficci welcomed the move to cut the prices of petroleum products, “This will ease cost pressures on a range of consumer products including bulk items such as food grains, fruits and vegetables. Lowering of LPG (cooking gas) prices will significantly help consumer households,” said Amit Mitra, secretary-general, Ficci.