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    Food inflation falls to 7.78 pc for week ended 18th June

    Published on June 30, 2011

    Food inflation fell to a one-and-a-half month low of 7.78 percent for the week ended 18th June on the back of cheaper vegetables, pulses and potatoes.

    Food inflation, as measured by the Wholesale Price Index (WPI), stood at 9.13 percent during the previous week. It was over 20 percent during the comparable period of June, 2010.

    As per data released by the government on Thursday, vegetables became over 10 percent cheaper year-on-year during the seven-day period under review.

    Prices of pulses also went down by 9.50 percent during the week ended 18th June while potatoes became 2.39 percent cheaper on an annual basis.

    However, prices of other food items remained high during the week.

    The latest numbers on price rise of food items are the lowest since the week ended 7th May when food inflation stood at 7.47 percent.

    It comes a day after Prime Minister Manmohan Singh said that inflation will come down to 6.5 percent by March-end if international oil prices soften and commodity prices do not rise further.

    Headline inflation in the country stood at 9.06 percent in May.

    The latest week-on-week fall of 1.35 percentage points in food inflation is the sharpest in four-and-half months.

    The previous record of a decline of over 2 percentage points had happened in the first week of February.

    Meanwhile, inflation in overall primary articles stood at 11.84 percent for the week ended 18th June down from 12.62 percent in the previous week. Primary articles have a share of over 20 percent in the WPI basket.

    During the week under review, fruits became 24.76 percent more expensive, while eggs, meat and fish grew dearer by 10.32 percent. Onions were also up by 16.08 percent and cereals by 4.76 percent.

    Inflation of non-food primary items stood at 17.91 percent during the week ended 18th June down from 18.43 percent in the previous week.

    Fibres were up 39.59 percent on an annual basis, while minerals became more expensive by 28.51 percent.

    The hike in prices of diesel and kerosene announced last week by the government was also reflected in the latest inflation numbers.

    Fuel and power became more expensive by 12.98 percent year-on-year. Inflation in the fuel and power index was 12.84 percent in the previous week.

    The RBI had said that headline inflation in the next few months would be driven more by high global commodity prices, rather than prices of food items, as was the case in 2010.

    Food inflation was in double digits for most of last year, before showing signs of moderation since March this year. However, it has again started going up since the second half of May.

    The latest fall in food inflation numbers is likely to come as a relief to the government, which had to deal with a series of bad news during recent weeks on the economic front.

    While January-March economic growth stood at 7.8 percent, the lowest in five quarters, industrial output also slowed down to 6.3 percent in April.


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