Food inflation Ebbs to 10.63 pc; A Good Sign: Pranab

Friday, 18 November 2011, 00:14 IST   |    1 Comments
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Bangalore: Food inflation eased marginally to 10.63 percent for the week ended November 5, prompting Finance Minister Pranab Mukherjee to say it is a "good sign" and the common man will get some relief if the trend continues. Food inflation, as measured by the Wholesale Price Index (WPI), declined by 1.18 percentage points in the week under review from 11.81 percent in the previous week that ended on October 29. It stood at 11.41 percent in the corresponding week of the previous year. "... If this trend of food inflation continues, then it is a good sign. At least on the food front, we may expect some relief if this trend continues for some more time," Mukherjee told reporters here. The marginal decline, however, has not brought much relief to the common man at present, as prices of most commodities -- with the exception of onions and wheat --continued to remain firm. On the positive side, onions became cheaper by 22.89 percent year-on-year, while wheat prices were down 3.63 percent. Vegetables, however, grew dearer by 27.26 percent, pulses by 14.44 percent, milk by 10.74 percent and eggs, meat and fish by 11.73 percent. "We expect prices to display a moderate decline in the coming weeks. Overall, food inflation is expected to moderate to single digits in November, 2011, on account of a moderation in demand subsequent to the festive season, and ease substantially in December, 2011, reflecting the base effect," ICRA economist Aditi Nayar said. Inflation in the overall primary articles category stood at 10.39 percent during the week ended November 5, as against 11.43 percent in the previous week. Primary articles have over 20 percent weight in the wholesale price index. Inflation in non-food articles, including fibres, oilseeds and minerals, was recorded at 5.33 percent during the week under review, as against 6.41 percent in the week ended October 29. Fuel and power inflation stood at 15.49 percent during the week that ended on November 5, as against 14.50 percent in the previous week. Persistently high food prices are likely to exert further pressure on the government and the Reserve Bank to tackle the situation expeditiously. Headline inflation, which also factors in manufactured items, has been above the 9 percent-mark since December, 2010. It stood at 9.73 percent in September this year. The RBI has hiked interest rates 13 times since March, 2010, to tame demand and curb inflation. In its second quarterly review of the monetary policy last month, the apex bank said it expects inflation to remain elevated till December on account of the demand-supply mismatch, before moderating to 7 percent by March, 2012. "Going forward, the inflation numbers will tend to move downward. This decline is good, but over the long run, we still need to set right the fundamentals of fiscal deficit agriculture production if we wish to see the numbers on the lower side of the target range," financial services firm KASSA Director Siddharth Shankar said.
Source: PTI