Food inflation at 18-month low of 7.7%

Food inflation declined to an 18-month low of 7.7 per cent during the week ended April 30, but economists said the rate of price rise was still at an elevated level and the government cautioned that non-food prices are exerting pressure on manufactured product rates.

Food inflation fell from 8.53 per cent a week ago, but fruits turn quite costlier. Fruits inflation rose to 35.43 per cent during the week against 32.69 per cent a week ago.

Egg, meat and fish inflation, which was in double digits a few weeks ago, was down to 4.62 per cent from 5.13 in the previous week. Vegetable prices declined by 3.64 per cent against a rise of 3.44 per cent in the previous week.

Finance Minister Pranab Mukherjee expressed the hope that food inflation will moderate in the coming weeks.

However, he expressed concern over non-food items. “Even though food inflation is declining, the concern on higher core (manufactured products sans food items) inflation remains,” he added.

In non-food articles among primary goods (those in the un-processed form), inflation rose to 28.62 per cent during the week from 27.84 per cent a week ago. Fuel inflation remains steady at 12.25 per cent.

Overall inflation had risen to 8.98 per cent in March, against RBI projection of around 8 per cent and the finance ministry expectations of 7-7.5 per cent. RBI has pegged inflation at 6 per cent with an upward bias in March, 2012.

The Planning Commission expects inflation to average around 6 per cent this fiscal. “Softening is something which we have expected...I do think that the inflation is on its way down... I am hopeful that it (average inflation for 2011-12) may be around 6 per cent,” Commission deputy chairman Montek Singh Ahluwalia told reporters. April figures for overall inflation is expected to come shortly.