JOIN USDespite a high base of last year, the headline inflation rose by a huge margin in August and stood at 7.55 per cent from 6.87 per cent last month, triggered by soaring food and manufacturing.
But, more worrying is Thursday’s hike in diesel prices, the effect of which will be felt in coming months. Analysts said it is expected to keep the price pressure on essential commodities up in the months ahead.
“The diesel hike and the LPG dual pricing policy will kick in next month. The September index is thus likely to breach 8 per cent, since the primary effect of the diesel hike will be at least 0.6 per cent. As the price hike spreads through the economy, the spread effect will be more than 1 per cent,” economists said.
Official data said, a sharp increase in food items like pulses, wheat, potato and some other vegetables helped fan inflation in August.
The overall food inflation is headed for double-digits, as it now hovers around 9.14 percent. Barring vegetable, milk, onion and fruit, all others remained is in double-digits, with pulses and potato rising by 34 per cent and 69 per cent in August.
The government also revised upward June inflation figures. The WPI inflation for June is revised upward at 7.58 per cent from 7.25 per cent.
Reacting to Friday’s inflation numbers, Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, said, “Inflation is a consequence of macroeconomic imbalances.”