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Inflation, which is hovering over 7 per cent at present, is expected to fall to six per cent in the next four to six weeks, a survey said. Assocham Business Barometer survey of 240 CEOs and CFOs across various sectors revealed the industry outlook on prices is optimistic as majority believed that inflation would subside and slip to six per cent in the next four to six weeks. 

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• Microsoft to finally throw XP out of Windows on June 30

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What is triggering the food shortage that has engulfed the world? Why is everyone pointing fingers at one another? Why has inflation rocketed throughout the world, mainly due to the food crisis? In a recent remark, US president George Bush ‘enlightened’ the world by saying that the food crisis is due to the teaming millions of the Indian middle class.

On the other hand, if the UN Special Rapporteur on the right to food is to be believed, the US and the European Union have taken a “criminal path” by encouraging use of food crops to produce bio-fuels and thus contributing to an “explosive rise” in global food prices. Last year, the US used a third of its corn crop to create bio-fuels, while the European Union is planning to have 10 per cent of its need supplied by bio-fuels. The Special Rapporteur, in a press conference, warned of worsening food riots and a “horrifying” increase in deaths by starvation.

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When will the worm die down?

India’s wholesale price index rose 7.61 per cent in the 12 months to April 26, marginally higher than previous week’s annual rise of 7.57 per cent, government data showed on Friday. The rate matched a median forecast of 7.61 per cent in a poll of analysts.

It was the highest since an annual reading of 7.68 per cent on Nov. 13, 2004. The annual inflation rate was 6.01 per cent during the corresponding week of the previous year.

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Crude oil traded near new all-time highs above 124 dollars on Friday after the OPEC cartel insisted the market is well-supplied and being driven by speculators.

New York’s main oil futures contract, light sweet crude for June delivery, rose 61 cents to 124.30 dollars a barrel in Asian trade after closing at a record 123.69 dollars on Thursday at the New York Mercantile Exchange. In after-hours deals, the New York futures contract soared to an all-time high of 124.57 dollars.

OPEC Secretary General Abdalla Salem El-Badri said on Thursday that there was no shortage of crude oil, brushing aside US calls for higher output to dampen runaway prices.

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Indian inflation jumped to a fresh 42- month high in mid-April, and analysts said it is unlikely to ease soon as price pressures persist and fiscal and monetary steps will take time to have an impact.

Data released by the government on Friday showed the wholesale price index rose 7.57 percent in the 12 months to April 19, above the previous week’s 7.33 percent and outstripping market expectations of an annual rise of 7.38 percent. Wholesale inflation now stands at its highest since Nov. 13, 2004, when it was 7.68 percent. The latest rise was largely driven by higher prices of foods, metal products, and industrial fuels.

The government and central bank have rolled out a string of policy changes in recent weeks as inflation has soared. In the latest move, the Reserve Bank of India on Tuesday raised the cash reserve ratio (CRR) by 25 basis points to 8.25 percent, its highest level in seven years, and said it was ready to act again if price pressures continued to build. Deposit rates are expected to be revised downwards to absorb cost of the hike in cash reserve ratio (CRR), bankers said on Thursday. With credit growth slowing down, they said lending rates will not be raised in the short term. Finance minister P Chidambaram said on Thursday he does not expect interest rates to go up following RBI move to hike mandatory deposits of banks by 0.25% to 8.25%.

Economists expect the central bank to focus on draining inflation-fuelling cash from the system, while the government moves to fix supply-side problems. The Congress Party-led coalition, under pressure from its allies, also unveiled new measures on Tuesday to tame inflation and guard food supplies, slapping export taxes on basmati rice and some steel products. Fighting inflation has become a top priority for the government as it heads towards a general election due by May 2009 and a series of key state polls this year.

Meanwhile, Finance Minister P Chidambaram on Friday said inflation will be tamed and food prices will come down sooner than other prices.

Policy planners the world over are grappling with soaring food and raw material prices. But India, which has about 260 million poor, is especially sensitive to rising prices as food accounts for a much higher proportion of people’s expenditure than in developed economies.

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• Microsoft cuts Xbox prices by upto 20% in four Asian regions and upto 30% in European regions
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