Food inflation dips sharply to 13.75%

Oct 28, 2010 |

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Oct. 28: Food inflation dipped sharply to touch 13.75 per cent — down 1.78 percentage points — for the week ended October 16, on improved supplies. However, economists said the RBI will still raise short-term rates. The annual food inflation was 15.53 per cent in the previous week, and 12.15 per cent in a year ago period.

It has remained in double digits for around three mo-nths and analysts expect it to soften by November end, when kharif output comes in the market. “Food inflation has entered into the correction trajectory. Once kharif output becomes avai-lable in the market by Nov-ember, we will see food inf-lation coming down to single digit,” Yes Bank economist, Ms Shubhada Rao said. Weekly food inflation fell as vegetables became chea-per by 7.61 per cent.

This is the second straight week of decline in food inflation, which is at an elevated level, prompting analysts to raise RBI rates.

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