December 15th, 2011
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Food inflation declines to 4.35%

food-inflationNew Delhi: Food inflation fell to a nearly four-year low of 4.35 per cent. This is the lowest rate of food inflation since the week ended February 23, 2008, when it stood at 4.28 per cent. This will result in a decline in prices of essential items like vegetables, onions, potatoes and wheat. According to data released by the government today, onions became cheaper by 46.03 per cent year-on-year during the week under review, while potato prices were down by 33.28 per cent. Prices of wheat also fell by 4.43 per cent.

Overall, vegetables became cheaper by 12.28 per cent. However, other food products grew more expensive on an annual basis, led by protein-based items. Pulses became 11.76 per cent costlier during the week under review, while milk grew dearer by 11.08 per cent and eggs, meat and fish by 9.26 per cent. Fruits also became 9.37 per cent more expensive on an annual basis, while cereal prices were up by 1.85 per cent.

Food inflation, as measured by the Wholesale Price Index (WPI), stood at 6.6 per cent in the previous week. It was recorded at 10.78 per cent in the corresponding period last year. Yesterday, Chief Economic Adviser Kaushik Basu had expressed hope that food inflation may fall below 3 per cent in a month’s time.

The fall in food inflation comes as a silver lining for the government at a time when the economy is experiencing a slowdown, with GDP growth dipping to 6.9 per cent in the second quarter, the lowest rate of expansion in over two years.



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