Food inflation stays in negative zone

Aided by continued fall in prices of vegetables, especially onions and potatoes, India's food inflation remained in the negative territory for the fourth straight week.

The rate of inflation for food articles for the week ended January 14 stood at -1.03 per cent. It was about 17 per cent for the same week last year.

This trend of falling food inflation is likely to keep headline inflation at moderate levels in the last quarter, say economists.

This could prompt the Reserve Bank of India to look at a cut in its policy rates in the mid-quarter review in March, they said. India's headline inflation stood at two-year low of 7.47 per cent in December last year, primarily due to falling food prices.

For food inflation, the maximum drop in prices was seen in onion. There was also decline in prices of potatoes and other vegetables during the week under review. Food inflation has been in negative territory for the last four weeks in a row.

For the week ended January 7, December 10 and December 24, it was -0.42 per cent, -2.90 per cent and -3.36 per cent respectively.

For primary articles, which have a weight of 20.12 per cent in WPI, the annual rate of inflation stood at 1.89 per cent for the week ended January 14 as compared with 2.47 per cent for the previous week ended January 7.

In the case of fuel and power, the annual rate of inflation remained unchanged at 14.45 per cent for the week ended January 14.

Aided by continued fall in prices of vegetables, especially onions and potatoes, India's food inflation remained in the negative territory for the fourth straight week.

The rate of inflation for food articles for the week ended January 14 stood at -1.03 per cent. It was about 17 per cent for the same week last year.

This trend of falling food inflation is likely to keep headline inflation at moderate levels in the last quarter, say economists.

This could prompt the Reserve Bank of India to look at a cut in its policy rates in the mid-quarter review in March, they said. India's headline inflation stood at two-year low of 7.47 per cent in December last year, primarily due to falling food prices.

For food inflation, the maximum drop in prices was seen in onion. There was also decline in prices of potatoes and other vegetables during the week under review. Food inflation has been in negative territory for the last four weeks in a row.

For the week ended January 7, December 10 and December 24, it was -0.42 per cent, -2.90 per cent and -3.36 per cent respectively.

For primary articles, which have a weight of 20.12 per cent in WPI, the annual rate of inflation stood at 1.89 per cent for the week ended January 14 as compared with 2.47 per cent for the previous week ended January 7.

In the case of fuel and power, the annual rate of inflation remained unchanged at 14.45 per cent for the week ended January 14.

> krsrivats@thehindu.co.in

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