Food inflation eased to a four-week low but was still high at 9.47 per cent for the week ended September 3. Though there was a marginal decline in inflation, it may not ease pressure on the Reserve Bank of India (RBI), which is facing a tough choice between controlling inflation and boosting growth in its monetary review tomorrow.
Except potatoes, onions, fruits and milk, inflation in almost all food products declined in the reported week. Food inflation, as measured on the basis of the Wholesale Price Index, stood at 9.55 per cent in the previous week and 15.16 per cent during the corresponding week of the last year.
However, finance minister Pranab Mukherjee was not amused by the fall, but exuded confidence that monthly overall inflation would start moderating.
“As I have maintained, we should not see much in the weekly fluctuations. I would, however, add that we may have seen the peak as far as monthly inflation rates are concerned (in August). Here onwards, we should see a gradual moderation in monthly headline inflation,” he said in a statement posted on the finance ministry’s page on social networking site Facebook, for the first time. The overall inflation rose to a 13-month high of 9.78 per cent in August, according to an official data released yesterday.(Click here for graphs)
Inflation in onions, seen as a major worry for many weeks, rose marginally to 42.98 per cent for the week ended September 3 from 42.03 per cent a week ago. The rate of price rise in potato, however, leaped to 21.16 per cent from 13.38 per cent during the period. Inflation in fruits rose considerably to 22.64 per cent after easing last week at 16.57 per cent.
The rate of inflation in milk rose to 10.02 per cent from 9.12 per cent.
Non-food inflation in primary articles (unprocessed ones) also moderated to 18.49 per cent during the period.
“Initially, I had expected this (food inflation) number to fall substantially but looking at the build-up of the inflation from March 2011, I do not expect the numbers to fall sharply after three months,” said Siddharth Shankar, director of financial services firm KASSA.
RBI is slated to come out with its monetary review tomorrow. It has already raised policy rates eleven times, but overall inflation has been over 9 per cent for the ninth month in a row till August, while economic growth numbers have been coming down due to rising interest rates.
