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Annual food inflation eases to lowest in six years


December 29, 2011 - New Delhi

Union Finance Minister Pranab Mukherjee on Thursday said that annual food inflation eased for a ninth straight week to its lowest in nearly six years in mid-December on improved supplies.

Speaking to reporters here Mukherjee stated that the rates of inflation had slowly gone down while reading the weekly figures on the Wholesale Price Index (WPI).

"Weekly figures on all four indicators WPI Primary Articles, has come down from 3.78 to 2.70. WPI Food has come down from 1.81 to 0.42. Even fuel, power light and lubricants which is ruling very high for quite sometime 15.49, 53,53. It has come down to 14.37. WPI Non Food Primary Articles have come down from 0.28," he said.

Mukherjee also added that the fall in inflation over the period has been rather sharp and it has been significant in the terms of food items.

"If you compare a longer period of a four weekly or six weekly from November 5 to December 17, then you will notice that the fall is sharp. For instance primary articles, it has come down from 10.39 to 2.70. Food articles have come down from 10.63 to 0.42. Feel no much difference.15.49 to 14.37 of marginal divide. Non-Food varies sharp fall 5.33 to 0.28. That means less than half a percent inflation in two items. WPI Non-Food Primary and WPI Food," he said.

The Finance Minister was optimistic that the inflation would see the downward trend.

"If this trend continues, what I expected at the end of the year, the Wholesale Price Index will be around six percent plus minus," he said.

Headline inflation was 9.11 percent in November, staying stubbornly above 9 percent for a year mainly driven by high food prices.

The Reserve Bank of India, which has raised its interest rates 13 times since March 2010 to tame sticky inflation, expects the headline inflation to ease to 7 percent by March.

With risks to economic growth mounting, pressure is building on the RBI to reverse its tight monetary stance.

The RBI left its rates steady at its last review early this month and sent a strong signal that its next move was likely to be an easing of monetary policy.

The spiralling inflation has been one of the biggest problems that the Congress led UPA government has been facing over the last one year creating problems among the voters base.

ANI

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