Saturday, 21 June 2008

Inflation races to 13-year high of 11.05%

NEW DELHI: Inflation raced to a 13-year high of 11.05 per cent for the week ended June 7, 2008, driven by a 7.8 per cent rise in fuel, power and lubricants prices and a 14 per cent surge in ATF prices.

Non-food articles were up by 1.04 per cent. Food articles, however, were down by 1.1 per cent. Inflation was 8.75 per cent for the week ended May 31.

A poll on Wednesday had estimated the annual inflation rate to have jumped to 13-year highs near 10 per cent in early June, powered by a fuel price rise.

The wholesale price index was forecast to have risen to 9.82 per cent in the 12 months to June 7, which would be the highest since June 3, 1995, when annual inflation was at 9.89 per cent.

The forecasts from 12 analysts ranged widely from 9.63 per cent to 10.62 per cent, and compared with an annual rise of 8.75 per cent in the previous week.

Four economists in the poll estimated the data to come in at above 10 per cent, its first double-digit reading since May 27, 1995.

India had raised state-set fuel prices by about 10 per cent on June 4, and the RBI last week raised its key lending rate for the first time in more than a year to contain inflation expectations.

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