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Friday, Jun 10, 2011
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NEW DELHI: Food inflation touched a two-month high of 9.01 per cent for the week ended May 28, notwithstanding the Finance Ministry and Planning Commission claims that inflation would moderate in the coming months.
Riding on the back of increased prices of fruits and onions, food inflation, as measured by the Wholesale Price Index (WPI), was 8.06 per cent in the previous week. In the last week of May, 2010, it was as high as 20.62 per cent. The last time when food inflation was above 9 per cent was for the week ended March 26, when it had stood at 9.18 per cent.
According to the official data released by the government on Thursday, fruits became 30.78 per cent more expensive year-on-year, while onions were up by over 14 per cent. In addition, milk prices went up by 8.49 per cent and egg, meat and fish became dearer by 6.99 per cent. Cereals went up by 5.77 per cent on an annual basis. “If the monsoon is favourable, food prices will come down over the next 2-3 months,'' Prime Minister's Economic Advisory Council Chairman C. Rangarajan said.
Experts said a lot depended on the progress of monsoon and how it behaves. “The monsoon will play a major part in determining the food inflation trajectory. If the monsoon is normal, we may well see a moderation in the rate of price rise of food items in the months to come,'' Standard Chartered Head of Research Samiran Chakraborty said. Following its arrival in Kerala in the last week of May, the monsoon has progressed till Maharashtra and Andhra Pradesh and the forecast says it will gain momentum in next few days. During the week under review, inflation of overall primary articles stood at 11.52 per cent, up from 10.87 per cent in the previous week. Primary articles have a weight of 20 per cent in the overall inflation basket. However, inflation of non-food primary articles fell to 20.97 per cent from 21.31 per cent in the previous week. Experts were of the view that sustained high global commodity prices would put pressure on headline inflation, which has been above 8 per cent since January, 2010. Headline inflation stood at 8.66 per cent in April.
The Reserve Bank of India, in its Monetary Policy for 2011-12, had projected that the overall inflation would average 9 per cent during the first half of this fiscal, before moderating to around 6 per cent by the end of the financial year.
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