Food inflation touches two-month high (Lead)June 9th, 2011 - 6:10 pm ICT by IANS
New Delhi, June 9 (IANS) India’s food inflation rose to more than a two-month high at 9.01 percent for the week ended May 28 as prices of essential items like fruits, meat, milk and onions increased, official data showed Thursday.
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.
Food inflation had dipped to 8.06 percent the week before.
“Food inflation has reached over 9 percent and stands at a ten-week high. This is above the comfort level. Commodity price fluctuations, particularly that of crude continues to have an impact,” said Anis Chakravarty, director at Deloitte Haskins and Sells.
“As we observe, pricing pressures have not eased in spite of the focused rate hikes by the RBI. It may be time to review this strategy and consider alternate price stabilization mechanisms to minimise the effect of volatility,” he added.
The RBI has hiked key interest rates nine times in the past 14 months to tame inflation and Governor D.Subbarao had said that the central bank’s first priority would be to bring down inflation even if it meant sacrificing growth in the short-term.
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.
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.
The following are the yearly rise and fall in prices of some main commodities that form the sub-index for food articles:
Onions: 14.02 percent
Vegetables: (-) 0.2 percent
Fruits: 30.78 percent
Potatoes: (-) 2.87 percent
Milk: 8.49 percent
Eggs, meat, fish: 6.99 percent
Cereals: 5.77 percent
Rice: 2.69 percent
Wheat: 0.9 percent
Pulses: (-) 9.49 percent
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