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Food prices drive India inflation | Food prices drive India inflation |
(10 minutes later) | |
Inflation in India has hit a three-year high as a result of spiralling food and energy costs, official figures show. | Inflation in India has hit a three-year high as a result of spiralling food and energy costs, official figures show. |
India's wholesale price index, released weekly, hit 7% for the year up to 22 March, the highest since December 2004. | India's wholesale price index, released weekly, hit 7% for the year up to 22 March, the highest since December 2004. |
The government has been taking steps to control prices, banning exports of non-basmati rice and scrapping import duties on cooking oils and maize. | |
Economists said the data could trigger a rise in interest rates this month, earlier than many had expected. | Economists said the data could trigger a rise in interest rates this month, earlier than many had expected. |
India's Economic Times says the government is considering a price ceiling on commodities if all other measures fail to bring down inflation - a law last used in the 1970s. | India's Economic Times says the government is considering a price ceiling on commodities if all other measures fail to bring down inflation - a law last used in the 1970s. |
Inflation is beyond anybody's expectations D K Joshi, principal economist, Crisil | |
In India, the wholesale price index, which measures inflation at the "factory gate", is more closely watched than the consumer price index because it tracks a wider range of goods. | |
The consumer price index reflects shop and market prices. | |
"Inflation is beyond anybody's expectations and I expect further firefighting measures from the government," said D K Joshi, principal economist at Crisil. | |
"One can forget lowering of interest rates for some time to come." | |
Record prices of rice, wheat and other foodstuff, along with the sky-high oil price, have fanned inflation worldwide. | |
This has prompted many governments to impose price controls and curb exports of essential goods. | |
India has raised the cost of borrowing nine times since October 2004. | |
Growth is expected to slow this coming financial year to about 8%, its weakest rate of expansion since 2005, but still a robust rate of growth. | |
In the year ending 31 March 2008, the economy grew 8.7%. |
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