There is a sense of deja vu in the government's reaction to the latest inflation figures announced on Friday. For the week ending with May 17, inflation measured by the WPI index climbed to a 45-month high of 8.1 per cent. During the corresponding week last year, inflation was at 5.3 per cent. Finance Minister P.Chidambaram termed the development worrisome and suggested that although recent government measures would act to contain inflation, it might take a while bef ore there is a distinct moderation. That is because global crude and other commodity prices continue to be at record highs. On several counts, inflation this time is a global phenomenon affecting the rich and the poor countries alike. Yet its impact on the world's poor is particularly severe. It is no coincidence that at a time inflation is raging, the world's political leaders as well as the IMF, the World Bank and the FAO are concerned over an unprecedented food crisis. High food prices have fuelled inflation. Unfortunately there is no consensus on what has contributed to the serious food shortage. Some of the remedial measures to be discussed at a forthcoming high-level ministerial meeting include providing emergency assistance to the worst-affected countries either by way of food aid or cash subsidy or a combination of the two. But more enduring solutions involve raising the levels of agricultural productivity in countries that had neglected the rural sector. While India continues to reel under high food prices, the good news is that after the recent harvest food production has touched a record 227 million tonnes. The government has procured for the public distribution system 21 million tonnes of wheat, higher than its target. That it is holding more than the normal food stocks is in itself a moderating factor. If it is well publicised, there ought to be less anxiety over the availability and cost of a key staple item. That in turn should help temper medium-term price concerns over the average food basket. However, inflation expectations are governed not by statistics but by experience. In India, perceptions of inflation will unfortunately remain high for one major reason. The prices of transportation fuels are bound to go up after an imminent revision. No matter at what new levels diesel and petrol retail, it will be very difficult to hold down inflationary expectations, which will influence both consumer and trade behaviour. That is why as much as the fuel price hikes, expectations of a further increase will reinforce inflation and continue to affect the public mood.