NEW DELHI: Food inflation for the week ended May 28 rose sharply by almost a percentage to 9.01 percent as prices of essential items like fruits, meat, milk and onions increased, official data showed Thursday.
The latest numbers are the highest level of food inflation since the week ended March 26 when it had stood at at 9.18 per cent. For the last two months, the rate of price rise of food items has been below the 9 per cent mark.
Food inflation had dipped to 8.06 percent the week before. The persistently high inflation is expected to result in another rate hike from the Reserve Bank of India (RBI) when it conducts a mid-quarterly review of the monetary policy June 16.
Inflation has continued to reign high despite the RBI hiking key interest rates nine times in the past 14 months.
As per data released by the commerce and industry ministry, the annual food inflation rose to the highest level in at least six weeks.
The primary articles index too rose for the week under review to 11.52 percent, while those for fuels and power rose 12.46 percent.
As per data released by the government today, fruits became 30.78 per cent more expensive year-on-year, while onions were up by over 14 per cent.
During the week under review, milk prices were up by 8.49 per cent and egg, meat and fish became dearer by 6.99 per cent. Cereals also became costlier by 5.77 per cent on an annual basis.
However, the prices of pulses went down by 9.49 per cent year-on-year, while vegetables and potatoes became cheaper by 0.20 per cent and 2.87 per cent.
Inflation in overall primary articles, which have a weight of 20 per cent in the headline WPI, was reported at 11.52 per cent during the week under review, up from 10.87 per cent in the previous week.
However, inflation of non-food primary articles fell to 20.97 per cent, as against 21.31 per cent in the previous week. This is likely to bring some cheer to the government and the Reserve Bank, who have termed inflationary pressure from the core (non-food) segment as the biggest threat to the economy in the near future.
The World Bank, in a recent report, cautioned that India's economy could grow at a slower rate in the current fiscal as elevated inflationary pressures could cut into disposable incomes and household spending, thus resulting in a moderation in domestic demand.
RBI may hike rates as food inflation hits 9.01%
CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
09 June 2011
CAclubindia
