Pranab sees inflation in single digit

Despite food inflation ruling in double digits, Finance Minister Pranab Mukherjee today asserted the "actual" food prices have come down substantially for the week ended February 5, expressing confidence it would come to single digit "in quite some time".

Food inflation has declined to a 2-month low of 11.05% for the week ended February 5, from 13.07% in the previous week.

"Inflation in food articles has come down sharply. Actual food prices have fallen very substantially with the index going down to 182.9 from 186.9 in the previous week," Mukherjee said.

Driven by high vegetable prices, the food inflation is in double digit for the past two months and even crossed 18% in the last week of December 25.

"In quite some time food inflation will also be under single digit," the Finance Minister added.

However, Mukherjee cautioned that weekly and monthly fluctuations in inflation numbers "are always deceptive".

Mukherjee said the decline in food inflation should result in overall inflation going down over the next 1 or 2 months.

"I hope as I mentioned earlier, by March we able to reach overall inflation of 7%," he said.

The headline inflation measured on WPI has also moderated, coming down to 8.23% in January from 8.43% in the previous month.

The decline in food inflation for the past two weeks prompted Planning Commission Deputy Chairman Montek Singh Ahluwalia to say the trend would continue.

"I am glad that (food) inflation has come down and I do expect that (the decline) would actually continue," Ahluwalia said.