Food inflation went up by a notch, to 16.49 per cent, for the week ended May 8, and analysts expect prices to remain around this level until the advent of a normal monsoon.
Annual food inflation in the previous reporting week was 16.44 per cent.
Analysts said that food inflation would come down drastically only in the later half of the fiscal when the impact of a normal monsoon becomes visible on crops.
Fuel prices remained flat over the week, but analysts said the Cabinet's decision to hike natural gas prices would increase rates of gas-based fuels.
The government yesterday more than doubled the prices of natural gas to USD 4.20 per mmBtu.
"Fuel prices are slated to move up and in the coming days non-food articles will put pressure on inflation," an economist with a leading bank said.
On a weekly basis, vegetables turned expensive by 2.41 per cent, onions turned dearer by 5.73 per cent, potatoes by 0.95 per cent and fruits by 0.41 per cent, while prices of urad and moong rose by two per cent each.
"Food prices will remain at around 17 per cent for the next 2-3 months. Eventually prices will come down with clarity on this year's monsoon and in the second half of the fiscal we should see some relief," Crisil Principal Economist D K Joshi said.
During the week, prices of non-food articles declined by 0.35 per cent, as raw rubber prices sank 7 per cent and linseed fell 2 per cent.
On an annual basis, pulses turned costlier by 33.65 per cent and fruits by 17 per cent.
Economists said the summer is making management of perishable food articles a difficult task and it is causing prices of fruits and vegetables to shoot up.
"The rise in food inflation is due to high vegetables prices which is increasing because of summer pressure on perishables. Timely arrival of monsoon should have some cooling effect," Yes Bank chief economist Shubhada Rao said.
However, even if food prices decline after the monsoon, prices of manufactured items may see a rise due to hardening of rates globally.
Finance Minister Pranab Mukherjee recently said he expects inflation to fall below 5 per cent by the end of this fiscal from the current 9.59 per cent in April.
The Reserve Bank projections peg inflation at 5.5 per cent by end of this fiscal.
