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Inflation At 0.57 Pct...
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It was above a median forecast of 0.09 per cent in a Reuters poll of analysts. The annual inflation rate was 8.23 per cent during the corresponding week of the previous year. Annual inflation for the week ended February 21 was revised to 2.99 per cent from 3.03 per cent. The Reserve Bank of India (RBI) cut its key short-term lending and borrowing rates by 25 basis points last week to shore up faltering growth in the face of the global economic slowdown.
The wholesale price index rose to 230.2 points in the week ended Apr 18 from 228.8 a week earlier.
The annual inflation rate was 8.23 per cent during the corresponding week of the previous year.
D.K. JOSHI, PRINCIPAL ECONOMIST, CRISIL, MUMBAI
"This is an unexpected surprise. Food prices are going to be a major challenge now. The pressure from fuel and manufacturing groups is not there now. But, I think that should not stop inflation from going down as last year's high-base effect will also kick in and eventually inflation will come down."
ABHEEK BARUA, CHIEF ECONOMIST, HDFC BANK
"I am actually surprised. The fact that this is significantly higher than market consensus points to higher primary product prices inflation and this is a spilling into the manufacturing sector. For the past three weeks, we have been saying this as a one-off shock but now I am beginning to have a doubt on that view and this is reflective of a deeper and longer-term problem with agriculture."
"We have to track that space carefully as what happens with inflation trends much above expectations is that a dip in bond yields due to recent monetary policy actions and that will revert due to high government borrowings. I don't think we will be getting into deflation by end-April."
MRIDUL SAGGAR, CHIEF ECONOMIST, KOTAK SECURTIES
"That was expected. Sugar prices have gone up substantially and cereals were under pressure."
"Inflation could technically still come to negative from May, but it is a statiscal fact, on the high base."
"It is not that inflation is a dead issue. We need to watch out ... In typical deflation, you see price levels falling; that is not going to happen. Price levels are not falling, manufacturing price levels are stable."
MARKET REACTION: Financial markets closed due to a holiday.
It said wholesale-price based was expected to turn negative early in the current fiscal year but this should not be interpreted as deflation for policy purposes.
The wholesale price based-inflation rate has fallen sharply since peaking at just under 13 per cent in August, but annual consumer price inflation in February was 9.63 per cent, as prices of food products remain firm.
India has cut fuel prices twice since December, helping the WPI inflation rate to fall quickly.
Since October, the central bank has cut its key lending rate by 425 basis points, and the government has announced spending measures and cut some taxes and duties to boost growth.
It was above a median forecast of 0.09 per cent in a Reuters poll of analysts. The annual inflation rate was 8.23 per cent during the corresponding week of the previous year.
Annual inflation for the week ended February 21 was revised to 2.99 per cent from 3.03 per cent.
The Reserve Bank of India (RBI) cut its key short-term lending and borrowing rates by 25 basis points last week to shore up faltering growth in the face of the global economic slowdown.