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Moderating food price levels could mark an end to the current bout of double-digit food inflation that has lasted a record 38 straight months; the longest spell since India's Independence.
Food inflation eased to its lowest level in over three years to 4.35 per cent during the week ended December 3, down from the preceding week's 6.6 per cent.
The latest round of double-digit average food inflation — running from September 2008 to October 2011 — beats the two episodes of high persistence in the early 1970s and the late 1970s to early 1980s, during when average food inflation stayed above the 10 per cent mark for 35 months and 32 months, respectively.
Since then, high food inflation episodes were relatively short-lived, with the longest one lasting 27 months in the early 1990s. Even in the severe drought conditions of 1987, the double-digit food inflation episode lasted just 18 months.
All of that pales in comparison with the latest spell of 38 months when inflation stayed above 10 per cent, despite a record 13 rate hikes by the Reserve Bank of India since March last year.
If the brief interruption of 12-months (September 2007-August 2008) between the last two episodes of double-digit inflation is waived off, the two spells could be counted as one even more prolonged stretch of nearly 60 months.
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