Inflation rises to 0.61% on higher food prices

>> Friday, May 22, 2009

New Delhi, May 21 Inflation edged up in early May on account of higher food prices, but held near a three-decade low, giving more freedom to the RBI to take steps to support a slowing economy.

The annual Wholesale Price Index-based inflation rose 0.61 per cent during the week ended May 9, higher than 0.48 per cent during the previous week. The increase in headline inflation was primarily on account of food articles, with year-on-year inflation in items such as vegetables (21 per cent), cereals (12 per cent) and pulses (15 per cent) continuing to remain in double digits.

Wholesale prices may exhibit a declining trend for a few weeks in the coming months, though that does not mean India is in the grip of deflation, the RBI Governor, Mr D. Subbarao, had said last week.

Headline inflation has held below 1 per cent for two months, after reaching a 16-year high of 12.91 per cent last August.

Source - The Hindu Business Line.