Inflation at 11.05%, highest since 1995

Inflation based on WPI touched 11.05%, as per week ended 7 June 2008. This is the highest inflation since 6 May 1995. Infact, on doing further analysis, from 1995-2008, there have been 9 instances when inflation has been above 10% and 3 instances above 11% and all these are noted in April/May 1995.  

So, it is as high as that. Inflation has been surging worldwide and India is no different. However, unlike other countries India’s case is better. With developed countries, we are seeing high inflation and falling growth and it puts policymakers into a problem.  India has high growth (9%) and high inflation. This leads to easier choice for the policymakers as they need to focus on inflation. Growth would moderate, but it has to be accepted. Inflation impacts all, growth doesn’t impact all. 

The policymakers need to focus on inflation and is going to be the utmost priority.

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