Food inflation, as measured by the Wholesale Price Index (WPI), rose to 15.46 per cent for the week ended September 11, primarily due to rise in prices of potatoes and onions.
Food inflation stood at 14.77 per cent during the corresponding week in 2009 and at 15.1 per cent during the previous week ended September 4. This is the fourth consecutive week that the rate of food prices has risen, although signs of moderation had appeared in July and stayed on through the first half of August.
“This (food inflation) will definitely go down in future,” said Planning Commission Deputy Chairman Montek Singh Ahluwalia.
Crisil chief economist D K Joshi said: “There is very little doubt that food prices will come down…prices will start coming down by December as the new harvest come into the market.”
The fuel index registered no change during the week under consideration and stood at 11.48 per cent, same as the previous week, as against minus 8.44 per cent during the corresponding period in 2009.
Rangarajan on inflation
Economic Advisory Council Chairman C Rangarajan today said the overall WPI inflation was likely to fall to 6.5 per cent by December and 5.5 per cent by the end of the current financial year.
“Our estimate is that according to the new series, the inflation will fall to 6.5 per cent by end of December and 5.5 per cent by March 2011,” he told reporters in Chennai.
Rangarajan also said the fiscal deficit was under control and overall borrowing would remain within target.
