SME Times is powered by   
Search News
Just in:   • Air Asia India eyes corporate clients, foreign flights  • Facebook releases maps to help fight disease outbreak  • Sensex past 39k with 1,000 pts gain   • Sensex up 980 pts, VIX drops by 17%   • Google restricts Huawei's use of Android 
Last updated: 15 May, 2018  

Inflation.9.Thmb.jpg Inflation shocker

Inflation.Down.9.jpg
   Top Stories
» 'US-China trade war an opportunity for textiles sector'
» Forex reserve rises to over $420 bn
» 'India's high GDP growth has continued'
» 3rd meeting of Advisory Council of Finance Commission held
» Global trade tensions may hit exports: FIEO chief
Bikky Khosla | 15 May, 2018

The government came out with inflation figures for April on Monday, and while the recent data sets on manufacturing and services sector output had come as a relief, the latest inflation figures, both retail and wholesale, came as a dampener, raising question whether now the debate within the Monetary Policy Committee of the Reserve Bank of India will shift from ‘hold versus cut’ to ‘hold versus raise’. During the last few months, inflation seemed to be under control, but now it seems the relief was only temporary.

According to data furnished by the Ministry of Statistics and Programme Implementation, retail inflation rose to 4.58 per cent in April from a rise of 4.28 per cent in March and 2.99 per cent in the corresponding period of the previous year. Increase in prices of cereals, meat, fish and fruits played a key role in building up of this price pressure. It is also noticeable that with this rise in April, retail inflation reversed a declining trend of three months since January.

Now have a look at the wholesale inflation data. It jumped to a four-month high of 3.18 per cent in April from a rise of 2.47 per cent in the previous month. An exponential rise in food and fuel prices drove this spike. Food prices edged up by 0.87 per cent from a deceleration of (-) 0.29 per cent reported for March while cost of fuel and power increased at a fast pace of 7.85 per cent during the month, from a growth of 4.70 per cent in March. Fuel-wise, petrol inflation spiked to 9.45 per cent and diesel prices jumped to 13.01 per cent.

Meanwhile, the US sanctions on Iran has catapulted crude oil price in the global market, and India, needless to say, is among the most-vulnerable economies to this problem. Adding to these woes, the Indian Rupee, which on Monday ended at a fresh 16-month low of 67.51 against the US currency, is also embattling. So, now the inflation figures further complicate the situation, presenting a difficult dilemma for RBI in terms of holding rates to support growth and rising rates to fight against inflation and defend the currency against major swings.

I invite your opinions.

 
Print the Page Add to Favorite
 
Share this on :
 

Please comment on this story:
 
Subject :
Message:
(Maximum 1500 characters)  Characters left 1500
Your name:
 

 
  Customs Exchange Rates
Currency Import Export
US Dollar
66.20
64.50
UK Pound
87.50
84.65
Euro
78.25
75.65
Japanese Yen 58.85 56.85
As on 20 May, 2019
  Daily Poll
Is counterfeiting a major threat to SMEs?
 Yes
 No
 Can't say
  Commented Stories
» Starting an import export business: Basic guide for beginners(1)
» Cabinet approves turnover based new definition of MSMEs(1)
» RBI cuts key rates by 50 basis points(1)
 
 
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter