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Posts Tagged ‘inflation’

Food inflation at 12.21 pct y/y on Oct 22

Posted by Admin on November 7, 2011

http://in.finance.yahoo.com/news/Food-inflation-12-21-pct-y-y-reuters-1628243810.html

On Thursday 3 November 2011, 11:47 AM

NEW DELHI (Reuters) – India‘s food price index rose 12.21 percent, its highest in 9 months, and the fuel price index climbed 14.50 percent in the year to Oct. 22, government data on Thursday showed.

In the previous week, annual food and fuel inflation stood at 11.43 percent and 14.70 percent, respectively.

The primary articles price index was up 12.08 percent, compared with an annual rise of 11.75 percent a week earlier.

The RBI raised interest rates last month for the 13th and possibly final time in a tightening cycle that began in early 2010, on expectations that persistently high inflation will finally begin to ease starting in December.

(Reporting by Rajesh Kumar Singh; editing by Malini Menon)

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Rising inflation cost Indian households Rs 5.8 lakh crore

Posted by Admin on July 2, 2011

http://in.finance.yahoo.com/news/Rising-inflation-cost-Indian-yahoofinancein-811909637.html

Yahoo! India Finance, On Wednesday 29 June 2011, 10:20 AM

Bangalore: Inflation has knocked the bottom out of household budgets. Now, someone has come along and actually measured how big the hole in the collective household budget really is. Rising prices of food items, besides petroleum products and commodities, have burnt a hole in the pocket of the Indian consumer during the last three years.

Surging inflation cost Indian households an additional Rs 580,000 crore (around $129 billion) during the three-year period from 2008-09 to 2010-11, a Crisil Research study said.

The study concluded that price trends of commodities in the wholesale price index favour the middle and higher income classes, rather than poor and vulnerable Indian households who spend a large part of their income on food.

The study shows that growth of private consumption expenditure in nominal terms increased to nearly 17 per cent per year during this period from 14 per cent in the preceding 3 years mainly due to the rise in food inflation. “The rise in inflation to 8 per cent per year during 2008-09 to 2010-11 from 5 per cent in the preceding 3 years eroded the purchasing power of money and inflated the consumption expenditure bill of Indian households by Rs 5.8 trillion,” said Dharmakirti Joshi, Chief Economist at CRISIL.

Crisil said contrary to the general perception, prices of several commodities declined even during periods of high inflation. “Prices of many consumer durables have declined in the last few years. If adjusted for improvement in the quality of goods, the decline would be even sharper.”

Consumers immediately feel the impact of rising inflation in food articles because these items are purchased on a daily basis. Durables are not purchased frequently and hence, a fall in their prices tends to be overlooked while forming inflation expectations, said Vidya Mahambare, a senior economist at Crisil.

Price trends of commodities in the Wholesale Price Index favour the middle- and high-income classes, rather than the poor and vulnerable Indian households, who spend a large part of their income on food.

The middle- and high-income groups benefit more from falling prices of non-food manufactured items, particularly durable goods, as they have higher disposable income to spend on other goods and services, including consumer durables and for savings.

“The poor, with limited discretionary income to spend on consumer durables, do not benefit much from the lower prices. In contrast, rising prices of food items strain their discretionary spending,” the report said.

Higher food prices should be an incentive to enhance the production of food items, but this has not happened so far. In addition to price signals, productivity improvement in food/agriculture categories would require better technology and improved investments in irrigation. In the absence of these measures, high food inflation is here to stay, the report added.

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India services PMI up modestly, input prices at 30-mth high

Posted by Admin on February 4, 2011

http://in.finance.yahoo.com/news/India-services-PMI-modestly-reuters-3999984247.html

A waiter serves coffee to college students surfing the internet at a cafe in Bangalore in this April 6, 2000 file photo. REUTERS/Stringer/Files

 

On Thursday 3 February 2011, 10:31 AM

BANGALORE (Reuters) – Business activity in India’s services sector grew at a faster clip in January than in the previous month, boosted by new orders and expectations of solid growth, but costs also soared, a survey showed on Thursday.

The HSBC Markit Business Activity Index, based on a survey of around 400 firms, rose to 58.1 in January after falling to 57.7 in December from November’s four-month high.

It was the 21st consecutive month the key index of the service sector in Asia’s third largest economy has been above the 50 mark that separates growth from contraction.

“India’s service sector saw a slight acceleration in the momentum in January, with activities, orders, and employment growing a bit faster and readings staying firmly in expansionary territory,” said Leif Eskesen, chief economist for India & ASEAN at HSBC.

The PMI’s employment index and the business expectations index climbed to their highest in seven months, indicating Indian firms were more optimistic about the year ahead.

However, the input price index hit a 30-month high of 61.99 in January and prices charged were at a nine-month high, underscoring the threat that higher raw material prices are rapidly filtering into the broader economy, fueling inflationary pressures.

“As we saw for the manufacturing sector, however, the supply side is struggling to keep pace with the strong momentum in domestic demand, which is manifesting itself in accelerating input prices and is spilling over to prices charged,” Eskesen said.

India’s manufacturing sector expanded at a slightly faster pace in January but input prices jumped, adding to pressure from food inflation that the government and central bank are already struggling to contain.

“The current strong pace of activity is clearly not compatible with comfortable and stable levels of inflation, underscoring the urgency of continued monetary policy tightening and the need to prepare a budget for the next fiscal year, which is consistent with an appropriately contractionary fiscal policy stance,” Eskesen said.

India’s central bank raised interest rates on Jan. 25 by a quarter of a percentage point, bringing the repo rate to 6.5 percent, in an attempt to suppress stubborn inflation. The increase was its seventh rate rise over the past year and more hikes are expected to follow later in 2011.

The Reserve Bank of India has lifted inflation projections for March 2011 to 7 percent.

(Reporting by Ruby Cherian; Editing by Kim Coghill)

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Global imbalances returning, could fuel unrest – IMF chief

Posted by Admin on February 4, 2011

http://in.finance.yahoo.com/news/Global-imbalances-returning-reuters-1199879621.html

Dominique Strauss-Kahn, Managing Director, International Monetary Fund (IMF) smiles during a Thomson Reuters Newsmaker event at the Newseum in Washington, December 16, 2010. REUTERS/Molly Riley/Files
On Tuesday 1 February 2011, 12:44 PM

 

By Kevin Lim

SINGAPORE (Reuters) – The world economy has begun improving but is beset by problems such as high unemployment and rising prices which could fuel crippling trade protectionism or even lead to war within nations, the head of the International Monetary Fund warned on Tuesday.

Rising food and fuel prices in recent months have already hit poorer countries and are one of the factors behind massive anti-government protests in Egypt and in Tunisia, whose president was ousted last month.

The United Nations ‘ food agency (FAO) said last month that global food prices hit a record high in December, above 2008 levels when riots broke out in countries as far afield as Egypt , Cameroon and Haiti.

“The pre-crisis pattern of global imbalances is re-emerging,” Dominique Strauss-Kahn said in a speech in Singapore.

“Growth in economies with large external deficits, like the U.S., is still being driven by domestic demand. And growth in economies with large external surpluses, like China and Germany, is still being powered by exports,” he said.

“As tensions between countries increase, we could see rising protectionism — of trade and of finance. And as tensions within countries increase, we could see rising social and political instability within nations — even war.”

Over the next decade, 400 million young people would join the global labour force, posing a daunting challenge for governments, he added.

“We face the prospect of a ‘lost generation’ of young people, destined to suffer their whole lives from worse unemployment and social conditions. Creating jobs must be a top priority not only in the advanced economies, but also in many poorer countries.”

Unemployment stands at 9.4 percent in the United States while a number of European countries are also struggling to create jobs in a global economy where much of the growth is coming from emerging market countries.

DEVELOPED COUNTRIES ALSO AT RISK

Concerns about rising debt in developed countries, meanwhile, have increased in recent months.

Ireland was engulfed by Europe’s debt crisis late last year, Greece continues to struggle despite a rescue package and many market watchers fear Portugal and Spain may be next.

Last week Standard & Poor’s cut Japan ‘s credit rating and Moody’s warned it may place a negative outlook on the United States unless it can reduce its gaping budget deficit.

In Asia, the worries centre around inflation and analysts say central banks in countries such as Indonesia need to respond faster to contain rising prices.

Strauss-Kahn also said foreign exchange rate adjustments have an important role to play in addressing global economic imbalances and should not be resisted.

“Holding back such adjustment in one country also makes it harder, and more costly, for other countries to let their exchange rate adjust,” he said.

“For this adjustment to take place, time is of the essence, but asking for time only makes sense if there is a significant and regular move in the right direction.”

Chinese policymakers were moving in the right direction by taking steps to bolster domestic demand, he noted, though the United States and many other Western countries continue to push Beijing to let its yuan currency appreciate faster.

Strauss-Kahn said the IMF expected subdued growth of 2.5 percent for advanced economies this year as high unemployment and household debt weighed on domestic demand.

“Without jobs and income security, there can be no rebound in domestic demand — and ultimately, no sustainable recovery,” he said.

Emerging markets would grow at a faster pace of 6.5 percent, with Asia excluding Japan expanding by 8.5 percent, he said.

“Monetary policy in the advanced economies should remain supportive as long as inflation expectations are well anchored and unemployment stays high,” while Asia may need to do more to address the threat of overheating and a possible hard landing, he said.

(Editing by Kim Coghill)

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Highlights of measures announced to control prices

Posted by Admin on January 16, 2011

Cut onion

Most widely used vegetable in the World

http://in.finance.yahoo.com/news/Highlights-measures-announced-ians-2445394061.html

Indo Asian News Service, On Friday 14 January 2011, 2:59 AM

New Delhi, Jan 13 (IANS) The government Thursday announced a slew of measures to control prices of essential commodities. Following are the highlights:

— State-run National Agricultural Cooperative Marketing Federation (NAFED) and apex federation of consumer cooperatives, NCCF, to sell onions at Rs.35 per kg

— Stringent action against hoarders and black marketers. Cartelisation by large traders to be dealt with strictly dealt

Import and export of all essential commodities to be reviewed on a regular basis

— State units to intensify purchases of essential commodities, particularly edible oils and pulses, for distribution through their retail network

— Existing schemes for subsidised distribution of edible oils and pulses to be continued

Exports of edible oils and pulses, as well as non-basmati rice to remain banned

— Committee of Secretaries under the Cabinet Secretary to review the prices situation with individual states

— An inter-ministerial Group set up under the Chief Economic Adviser, Ministry of Finance to review the overall inflation situation

— State Governments to be urged to consider waiving mandi tax, octroi and other local levies to bring down prices further

— A scheme to support the state governments in the setting up of farmers’ mandis and mobile bazaars and to improve the functioning of civil supplies corporations and cooperatives

— Awareness campaigns to make people aware of cheaper alternatives to pulses like yellow peas with a view to influence consumption pattern in favour of such alternatives

— Involve Residents’ Welfare Associations and self-help groups in distribution of essential commodities to address local shortages and ensure that supplies reach the households with least intermediation cost

— Investments to be encouraged in supply chains including provisions for cold storages

— Storage capacities to be increased to stock last years bumper Kharif crop

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