Commentary on Indian News Article "Food prices push inflation to 6.95%"

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Food prices push inflation to 6.95%

BS Reporter / New Delhi Mar 15, 2012, 00:43 IST

http://business-standard.com/india/news/food-prices-push-inflation-to-695/467799/

After showing signs of moderation in the past few months, inflation reared its ugly head once again in February and rose to 6.95 per cent from 6.55 per cent in January. Even so, a break-up of the figures may give conflicting signals to the Reserve Bank of India (RBI) on rate cut in its monetary policy review tomorrow.

While food inflation has risen by over six percentage points in a span of just one month - from deflation to 6.07 per cent, the rate of price rise in manufactured products declined to 5.75 per cent in February from 6.49 per cent in January, according to official data released on Wednesday.

While the monetary policy works more on manufactured products inflation, the spurt in food inflation cannot be overlooked, feel economists.

Finance Minister Pranab Mukherjee admitted the existence of inflationary pressures, but expressed confidence that the rate of price rise would be close to 6.5 per cent by the end of the current financial year. "Inflationary pressure is there.... We will end the year with around