Monday, May 16, 2011

India inflation rate eases slightly in April 2011 to 8.7 pct

India inflation rate eases slightly in April 2011 to 8.7 pct : NEW DELHI (AP) — India's high inflation eased slightly to 8.7 percent in April as food prices increased at a slower rate, the government said Monday.

Finance Minister Pranab Mukherjee said Monday he was optimistic that food prices would come down further in the coming months as summer harvests boosted food stocks.

"The April prices have come down both in the manufacturing sector and the food sector. This is good trend, and if it continues then prices will be more moderated," Mukherjee told reporters.

Food prices rose 8.7 percent in April after a 9.5 percent jump in March. Prices of manufactured goods increased 6.2 percent compared with 6.5 percent in March.

Inflation was 9 percent overall in March.

The inflation rate is expected to jump again as the effects of a weekend increase in gasoline prices kick in. It was the eighth hike in gasoline prices since June 2010. The government is also likely to announce a hike in diesel and cooking gas prices.

India
, which imports around 70 percent of its oil, has been concerned about recent swings in the oil price on global markets.

With inflation still running high, India's central bank is expected to raise key interest rates at next month's policy review. The Reserve Bank of India raised interest rates by half a percentage point earlier this month, the ninth such hike in just over a year.

The Reserve Bank has raised the lending rate by 2.5 points since March 2010. The government revised February's inflation rate higher to 9.5 percent from the 8.3 percent previously announced. ( Source : http://moneywatch.bnet.com/economic-news/news/india-inflation-eases-slightly-in-april-to-87-pct/6233924/ )
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