Inflation will fall in Feb: Montek
Jan. 7: Notwithstanding the failed predictions of the past year, the government still believes that inflation figures will ease by March. Speaking to a news agency, planning commission’s deputy chairman, Dr Montek Singh Ahluwalia, said on Friday that food inflation will come down by February.
“The current spike in food inflation that you are seeing should be over by February,” Dr Ahluwalia told a new agency in an interview. Meanwhile, economy watchers feel that prices are set to remain high even if inflation numbers fall. “Of course, no one is talking of prices coming down. Inflation is the speed at which prices go up (that may come down),” says Mr D.K. Joshi, chief economist at rating agency Crisil.
Food inflation, which measures the rate at which prices of foodstuffs are increasing, was at a level of 18.32 per cent for the week ended December 25. Prices of fruits, vegetables, onions, milk and meat are up from 20-80 per cent compared to the last year.
Meanwhile, the finance minister on Friday wrote to the chief ministers asking them to ensure that supply chain problems that are pushing up food prices be removed.
“While there are certain weather induced supply constraints on certain items currently exhibiting high inflation, which goes against the seasonal decline in prices normally seen at this time of the year, a larger part of price rise is due to the widening gap between the wholesale and retail prices and the growing demand for these products due to rising income levels,” wrote the Union finance minister, Mr Pranab Mukherjee.
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