Inflation at -1.53%,food prices still rising

Inflation rose marginally to (-) 1.53 per cent for the week ended August 8 from (-) 1.74 in the previous week,even as food prices....

Inflation rose marginally to (-) 1.53 per cent for the week ended August 8 from (-) 1.74 in the previous week,even as food prices continued to rise amid an erratic and deficient monsoon. The food articles index surged 10.5 per cent compared with a year ago as a weak monsoon hit crops. It was the second week in a row that the food price index saw growth of at least 10 per cent.

Economists expect WPI-based inflation to rise sharply in the coming months. Inflation is expected to turn positive after September and reach 7-7.5 per cent by the year end,HDFC Bank economist Jyotinder Kaur said. The WPI inflation was at 12.82 per cent during the corresponding week of the previous year. CPI-based inflation stood at 9.29 per cent in June.

The government on Thursday raised the minimum support prices for paddy by Rs 100 a quintal and pulses by up to Rs 300 a quintal. This is expected to make pulses and cereals more expensive. Essential items like fruits turned expensive by 2.6 per cent,bajra and urad by 2 per cent each,and condiments,spices and arhar by 1 per cent each. Khandsari and rice bran oil were expensive by 3 per cent each,while imported edible oil,sooji and cotton seed oil were up by 2 per cent each,and maida,ghee and oil cakes by 1 per cent each.

If one looks at year-on-year comparison,prices of food items rose much more. Prices of vegetables rose by 40 per cent,cereals 11.6 per cent,pulses 17.6 per cent,condiments and spice by 4.7 per cent. Analysts say the government action is now needed to tame rising food prices caused by insufficient rainfall. FE