Inflation rises to 8.43 pc, case for RBI to hike rates

Posted By: Pti
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New Delhi, Jan 14 (PTI) Inflation shot up to 8.43 percent in December, from 7.48 per cent in the previous month, asprices of certain food and non-food items continued to show anupward trend.

After moderating somewhat in November, the overallinflation, measured on the basis of wholesale prices, rose inDecember as vegetable, like onion, and other protein-baseditems became expensive.

With the inflation showing no signs of moderation, it iswidely expected that RBI will raise the key policy ratesduring its quarterly monetary policy review on January 25.

For October, the figure has been revised upwards to 9.12per cent from the provisional number of 8.58 per cent.

It may be recalled, the food inflation, which accountsfor over 14 per cent in the overall WPI inflation, hasremained high through December and stood at 16.91 per cent.

A worried government yesterday announced a slew ofmeasures to contain price rise including de-hoardingoperations and closely monitoring export and import of fooditems.

As per the WPI data, prices of primary articles -- food,non-food articles and minerals -- shot up by 16.46 per cent onan annual basis, official data released here showed.

However, prices of certain food items declined on anyear-on-year.

While wheat became cheaper by 5.09 per cent, pulses fellby 10.89 per cent and potatoes went down by 26.57 per cent.

During the month, fuel and power prices went up by 11.19per cent, while manufactured goods became expensive by 4.46per cent on an annual basis.

Manufactured items have the highest weight of 64.9 percent in the wholesale price index, on the basis of whichinflation is calculated.

Within manufactured products, however, sugar prices easedby 9.91 per cent and leather and leather goods by 1.23 percent on an annual basis.

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