Inflation rises to a new high of 8.1 pc, FM worried

New Delhi: Inflation rose to 8.1 per cent from 7.8 per cent for the week ended May 17, Finance Minister P Chidambaram said on Friday.

The biggest factor fuelling the surge has been a rise in prices of food articles, which are up by 0.6 per cent. Fruit and vegetable prices rose 3 per cent while marine products were up 6 per cent. Fuel index, in particular, was up 0.4 per cent and coke, which forms a huge percentage, was up 31 per cent.

Terming it as “worrisome”, Chidambaram said government would aim to moderate inflation without dampening growth, and will take more steps if needed to tame inflation.

Addressing the fuel price issue he said any rise in administered prices of petrol will only be inflationary in the short term.

On country’s GDP growth, Chidambaram said all efforts will be made to ensure industry growth does not slacken.

He denied any widespread slowdown in economy and said chat corrective steps will be taken to stimulate manufacturing, however any interest rate hike had to be carefully calibrated

Chidambaram said he was confident of achieving 8.5 per cent growth in FY09 despite high oil prices.

Meanwhile, a Network 18 poll estimates inflation for the week ended May 10 will come down marginally to 7.78 per cent.

Last week, the Wholesale Price Index rose to a 42-month high of 7.82 per cent after it was pushed by a surge in fuel and power prices.