Inflation marginally up at 5.6%

Driven by higher prices of essential food articles, jet fuel and alcohol, inflation inched up further for the second consecutive week, to 5.64 per cent for the week ended January 17.

Inflation was higher by 0.04 per cent from 5.60 per cent a week before. Food items that became expensive during the week as a result of the eight-day truckers' strike include maize, bajra, jowar, rice, sugar and gur.

The truckers' strike, which ended on January 12, restricted the movement of goods, leading to shortage and price rise.

"It's an aberration and next week also we might see a little surge due to the spillover effect of the truckers' strike. But the trend is downward and it (inflation) will fall in the days ahead," HDFC Bank Chief Economist Abheek Barua said.

The RBI in its third quarterly review of monetary policy lowered inflation estimates to 3 per cent by March end.

The government decision to cut petroleum prices from today is expected to bring down inflation substantially in the coming weeks.

Petrol prices were slashed by Rs 5 a litre and those of diesel by Rs 2 per litre, while the domestic LPG rate was brought down by as much as Rs 25 per cylinder.

According to Minister of State for Finance P K Bansal, the cut in petroleum prices will bring down inflation by more than one percentage point.

During the week under review, prices of beer and spirits became dearer as much as 25 per cent.

In the fuel goods category, jet fuel and furnace oil became dearer by 4 per cent and one per cent, respectively.

Among manufactured items, caustic soda, zinc and sacking bags became expensive during the week.