Be quick in taming inflation: IMF to India

Written by Agencies | New Delhi, May 30: | Updated: May 31 2008, 02:10am hrs
Cautioning emerging markets like India on the rising global crude and food prices, the International Monetary Fund has said these countries will have to quickly expedite their endeavors to keep the inflation under control.

The multilateral funding agency has said higher crude prices could contribute significantly in fueling the core inflation in such emerging economies.

There very much is a danger that higher energy prices and high food prices will feed through into whats called core inflation, IMF Chief Economist Simon Johnson said.

Though the larger emerging markets, including India and China, are increasingly driving growth at the global level, he said if theres an inflation problem emerging there, it should be the case that the monetary and fiscal authorities act quickly to keep inflation down.

Core inflation is a measure of inflation that excludes certain items that can have temporary price shocks to give a correct picture of inflation.

Johnson further said if emerging economies do not take immediate steps, then theres going to be more trouble for the global economy.

Meanwhile, inflation in India rose to 45-month high at 8.1 per cent for the week ended May 17, up from 7.82 per cent in the last week on the back of rising prices of food and industrial fuels along with some manufacturing items.

IMF said world oil markets are likely to remain under pressure for some time before high prices have a corrective impact on both supply and demand.