Food Inflation on its way down to 7.58%

Policy-makers are bit relieved with low figures and if trend continues, it could weaken overall inflation. Food items contribute to 14% to headline inflation.

As per the data released by government today, pulse prices remained low by 7.67% as compared to corresponding week last year. However, prices of other food items continued to stay aweigh, price of onions rose 19.68%, fruits 15.84%, milk 10.76% and price of eggs, meat and fish grew almost 8%.

Cereals and Vegetables surged by 4.77% and 4.31%, respectively.

Price of primary articles fell from 11.58% previous week to 11.13% during the week under review. Primary articles have a share of over 20% in Wholesale Price Index.

Inflation of non-food items was rose to 15.50% for the week ended July 9 as compared to 15.20% in previous week.

Economists say food inflation is likely to remain in the range of 7-8% in the short term.

Overall inflation stood at 9.44% in June.

On July 20, the Finance Minister, Pranab Mukherjee expressed hope that inflation could decline to 6-7% by March 2012.

OneIndia Money