The Hindu : Business : Inflation breaches 5 p.c.-mark

Online edition of India's National Newspaper
Saturday, Mar 19, 2005

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Business

Inflation breaches 5 p.c.-mark

By Our Special Correspondent

NEW DELHI, MARCH 18. Even as mass consumption items such as wheat, fruits and vegetables turned cheaper, the rate of inflation, as measured by the wholesale price index (WPI) breached the 5 per cent mark during the week ended March 5, mainly due to higher prices of manufactured products such as edible oils and cement.

Consequently, the point-to-point rate of inflation inched up by 0.35 percentage point to 5.3 per cent during the first post-Budget week from 4.95 per cent during the week ended February 26 and the much lower 4.79 per cent in the corresponding week in the year ago period.

The current rise in inflation has belied the expectations of the Chief Economic Advisor, Ashok Lahiri, who had said that the level of inflation was likely to remain below 5 per cent till the end of March.

The inflation rate would have been still higher but for the decline in prices of primary products, mainly food and non-food articles, coupled with the static fuel prices which resulted in a mere 0.1 percentage point rise in the WPI to 188.9.

How long the domestic oil prices can be contained at the current levels is a big question mark, as the issue will have to be tackled sooner than later.

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