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Inflation jumped to a 41-month high of 7.41 per cent on Friday, seen as a deadly blow to the government and fanning expectations of more monetary tightening that would hit economic growth. Inflation has climbed steeply in Asia’s third largest economy from a trough of 3.1 per cent in October and is far above the central bank’s tolerance level of five per cent.

Terming soaring inflation rate as a global phenomenon, the government on Friday said it has no “magic wand” to bring it down immediately though it is taking and will take all possible steps to contain price rise. “Inflation is at a very high level in all emerging markets such as China (8.7 per cent), Russia (11.9 per cent), Argentina (7.3 per cent) and Turkey (8.1 per cent),” Kapil Sibal said.

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Concerned at the ever soaring inflation rate, that touched a 13-month high of 6.68 per cent, the Government has decided to hold a meeting of high-level cabinet committee on Monday to take stock of rising prices, Finance Secretary D Subbarao told reporters. He also added that Friday’s inflation numbers were quite disturbing and attributed them partly to high global commodity price. Continue Reading»

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