AFP: Indian inflation rises to nearly 9%


NEW DELHI — India’s inflation unexpectedly accelerated in March to nearly nine percent, data showed on Friday, piling pressure on the central bank to be more aggressive as it battles to tame price rises.

Annual headline inflation, measured by the wholesale price index, India’s main price measure, leapt to 8.98 percent in March from 8.31 percent the previous month, stoked by higher food, fuel and manufacturing costs.

The figure was far above market expectations of 8.30 percent and the highest of any major Asia-Pacific economy.

The commerce ministry also sharply revised upwards January’s inflation reading to 9.35 percent from 8.23 percent earlier.

“With inflation numbers of this magnitude, especially core inflation, the Reserve Bank of India (RBI) may feel compelled to be a bit more aggressive next time around,” said HSBC chief India economist Leif Lybecker Eskesen.

India released the data on the same day China revealed that inflation in the world’s second-biggest economy had soared to a 32-month high.

The Asian Development Bank warned last week that controlling inflation was the region’s “top priority” as strong growth, turmoil in the Middle East and Japan’s nuclear crisis drive up food and oil prices.

The RBI has raised its key policy rates eight times since March 2010, making it the most hawkish central bank in Asia.

“Inflation is the most important short-term problem,” said Montek Singh Ahluwalia, deputy head of India’s Planning Commission, who urged the RBI to use “all the flexibility” at its disposal.

Price rises are a major political headache for the embattled Congress party-led government, which is also reeling from a string of corruption scandals.

Poorer households, the backbone of the party’s support, have been especially hard hit by inflation which is a traditional lightning rod for political discontent in the country of 1.2 billion.

Fuel and power prices climbed 12.92 percent while food rose 9.47 percent, the commerce ministry data showed.

Economists expect the central bank to hike rates again at its next meeting on May 3, even with recent data showing industrial output slowing sharply as a result of monetary tightening.

“Today?s inflation number cements the case for a hike at next month?s meeting,” said Credit Suisse economist Robert Prior-Wandesforde.

Bank policymakers have sought to minimise the risks to economic growth by raising rates in quarter point steps, but economists now say it may move more boldly with a possible half a percentage point rise in May.

Ahluwalia warned high interest rates could derail the government’s nine percent growth target for this year by slowing investment and consumption.

“We may not hit nine percent,” he told reporters.

Economists now say inflation, initially fuelled by spiralling food prices, has spilled over into the general economy, pushing up wages and other costs.

Asian economies including South Korea, China, Indonesia and Taiwan are all battling inflation pressures with global prices of crude oil riding at $122 and other commodities costs rising.

China reported Friday 2011 first-quarter growth slowed slightly to 9.7 percent while inflation hit 5.4 percent year-on-year in March — its highest since July 2008.
[Story Source] [Contest win Rs 1000-100,000 now]

This post was submitted by prashant agarwal.

Related Posts
AFP: 18 dead as Indian truck runs over sleeping pilgrims

AFP: 18 dead as Indian truck runs over sleeping pilgrims

AHMEDABAD, India — A speeding truck in western India ran over and killed 18 Muslim pilgrims who were sleeping on a roadside early on Thursday morning, police said.The pilgrims were on their way to a f...
AFP: ‘Pakistani troops kill Indian soldier in Kashmir’

AFP: ‘Pakistani troops kill Indian soldier in Kashmir’

SRINAGAR, India — An Indian soldier was killed when Pakistani troops opened fire across the de facto border dividing Kashmir, the military said Monday, accusing Islamabad of a "major ceasefire violati...
AFP: CGames chief Hooper denies “lavish lifestyle”

AFP: CGames chief Hooper denies “lavish lifestyle”

NEW DELHI — Commonwealth Games Federation chief Mike Hooper denied Tuesday he felt threatened in New Delhi after an effigy of him was burned, and said reports of his "lavish lifestyle" were wrong.Last...
Kali-Ma, Hitler And Gandhi Among The Most Obnoxious Beer Labels Ever

Kali-Ma, Hitler And Gandhi Among The Most Obnoxious Beer Labels Ever

The worst names ever brewed.An Indian advocate recently filed a petition against an American brewing company, New England Brewing Co., for its 'Gandhi-Bot' beer. The gentleman claims that the issue is...
Indian CEOs who get Rs 1 crore

Indian CEOs who get Rs 1 crore

Mukesh Ambani has got company of at least 29 fellow corporate executives, including four from his own group Reliance Industries, in terms of annual salaries running into crores of rupees for th...
Indian communication satellite to be launched May 21

Indian communication satellite to be launched May 21

CHENNAI: All the preparatory activities connected with the launch of advanced communication satellite GSAT-8 on board an Ariane-V rocket May 21 are progressing satisfactorily at Kourou in French G...

Leave a Reply

We will keep You Updated...
Get Free Email Newsletter from VoteUpIndia Sign up for our free email newsletter. (Help?)
Read latest headlines in your favorite news reader
Follow VoteUpIndia  on Twitter Become a VoteUpIndia Fan on Facebook Subscribe to VoteUpIndia in Google Reader Add VoteUpIndia  to My Yahoo Add VoteUpIndia  to Netvibes Subscribe to Free Techie Buzz RSS Feed
Sponsored Links
Featured Video
Best Storytellers
Powered by Authors Widget
Recent Posts

McDonald's Suspends Employee, Probes Child's Eviction From Pune Outlet

PUNE: After reports emerged that an eight-year-old destitute child was thrown out of an outlet of...

Why Arjun Made a Humble Request to Cast Sonakshi in Tevar

It's all about wearing your Tevar, this new year. Arjun Kapoor looked dapper at the initial promotions...

5 things Modi needs to do ASAP, after Bihar loss

It's not correct to transpose the outcome from a state election as a referendum on the central government,...

Sehwag's half century in All Star tournament.

The first match has been really special. We thoroughly enjoyed being here. New York, you were brilliant....

Bihar Defeat May Lead to Silent Rebellion in BJP Against PM, Amit Shah: Arun Shourie to NDTV

NEW DELHI: In the aftermath of the BJP's debacle in Bihar, Arun Shourie, one time admirer of Narendra...

Court Refuses to Stop Gillette Razor Ad Starring Deepika Padukone

New Delhi: The Delhi High Court has refused to stop a Gillette razor advertisement starring Deepika...

Bigg Boss 9: Roopal Tyagi voted out of the house

TV actor Roopal Tyagi was evicted from reality show Bigg Boss on Sunday’s episode. Roopal is the...
Recent Comments
How i can submit my story...? and where i can see the staus of votes for this?
IFFI lose its art value,so it became lose it commercial value
Dear sir I am sending an article which is based on true story and needs your help to lime light such incidents which never come in
Thanks for the interesting article. Great Post. Keep it up
It is indeed heartening to learn that LSE, the world leader in higher education, will join hands with the most admired Reliance Foun
Tag Cloud