The Hindu : Front Page : Inflation breaches 5 per cent

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Saturday, Mar 08, 2008
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Inflation breaches 5 per cent

Special Correspondent

NEW DELHI: For the first time in 10 months, inflation breached the 5 per cent-mark to touch 5.02 per cent during the week ended February 23, mainly on account of a spurt in the prices of fruits, vegetables, milk, cereals and edible oils as also certain manufactured products.

Up from 4.89 per cent a week earlier, the higher inflation rate based on the wholesale price index also reflects for the first time the cascading impact of the hike in the domestic prices of petrol and diesel with effect from the midnight of February 14. A more worrying factor is the spurt in world crude prices to $106 a barrel, apart from the global uptrend in food prices.

Yet another first in recent months is the fact that at this level, the rate of inflation has exceeded the Reserve Bank of India’s ‘comfort’ zone of 4.5-5.0 per cent.

During the week ended February 23, the prices of fish (marine) became dearer by 6 per cent, mutton by 5 per cent, fruits and vegetables by 4 per cent, while milk and urad inched up by 2 per cent. A fall was witnessed in the price of arhar by 4 per cent and of moong by one per cent.

Among manufactured items, sunflower oil prices soared by 8 per cent, imported edible oil by 5 per cent and hydrogenated vanaspati by 4 per cent, while the prices of coconut oil, gur, groundnut oil and mustard oil went up by one per cent each. The prices of ghee and khandsari declined by one and 2 per cent.

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