The inflation, which may spark another rate hike by the year-end,
stood at 15.1 per cent a week ago, data compiled by India’s Commerce Ministry
showed.
However, some analysts expect that better farm output will
cool down food prices later this year. Food prices may ease as the June-September
monsoon rains have been sufficient to expand cultivation, reducing pressure on
inflation that has prompted India’s central bank to raise interest rates five
times this year, they said.
Rainfall this month has been 122 percent of the 50-year
average as of Sept. 14, according to the weather office, in contrast with last
year when rains were the least since 1972.
Though signs of moderation had appeared in July and stayed
on through the first half of August, this is the fourth consecutive week that
the rate of food prices has increased.
Many parts of India, including Delhi, Haryana, Punjab, Uttar
Pradesh, Himachal Pradesh, Assam and Rajasthan have been witnessing torrential
rains that have disrupted supplies of staples.
Annually, cereals prices rose 6.75 percent. While prices of
pulses rose 4.01 per cent, wheat and rice became costlier by 9.21 percent and
5.52 per cent respectively.
Among other basic food items, milk prices soared 23.41 per
cent during the week compared to the same period last year, while fruit prices
increased by 10.33 per cent.
While vegetables also became dearer by 6.84 per cent on an
annual basis, potato and onions became cheaper by 48.56 and 1.97 per cent
respectively.
While the fuel price index remained flat on the week, the
primary articles index rose 16.80 per cent, faster than the week-ago increase
of 16.22 per cent. The wholesale price index, the most widely watched gauge of
prices in India, rose 8.5 percent in August.
Last week, India’s Central Bank said headline inflation had
“plateaued,” but predicted that it may remain unacceptably high for some
months.
Still, inflation remains the “dominant” concern for the
Indian Central Bank and will determine any future rate increases, Governor
Duvvuri Subbarao said.
The Reserve Bank of India also boosted the repurchase rate
to six percent from 5.75 percent, and the reverse repurchase rate a half point
to five percent.
The bank said then its actions have brought the “monetary
situation close to normal,” two days after a report showed benchmark
wholesale-price inflation slowed to 8.5 percent in August from July’s 9.8
percent pace.
The latest inflation reading and that of the previous week
are from a new data series with changed base year, weightings and components
and are not comparable with the earlier data.
