Food inflation eased back to single digits, aided mainly by a dip in items such as vegetables and cereals. A favourable base effect is expected to contribute to a decline in food inflation in the coming weeks, according to analysts.

Data released by the Government on Thursday showed that food inflation, based on the annual Wholesale Price Index, rose 9.50 per cent in the week ended March 19, lower than the previous week's annual increase of 10.05 per cent.

The fuel index, however, climbed 13.13 per cent during the latest week, higher than the 12.79 per cent recorded in the previous reported week.

Headline inflation

According to the latest data, the primary articles index gained 12.98 per cent, compared with an annual rise of 13.53 per cent a week earlier.

Despite an easing of the weekly inflation estimate, the recent trends in the primary and fuel inflation suggest that overall WPI inflation for the month of March 2011 is likely to be above the RBI's forecast of 8 per cent, analysts said. The headline inflation had unexpectedly quickened to an annual 8.31 per cent in February from 8.23 per cent in January.

During the latest reported week, inflation in pulses was down by 4.40 per cent on a year-on-year basis. Vegetables, while rising 5.52 per cent, was sharply lower than the previous week's annual rise of 11.20 per cent, mainly on account of a big drop in annual inflation reported for onions (6.23 per cent during the week under review against 10.80 per cent in the previous week).

Fruits were up 24.67 per cent year-on-year and eggs, meat and fish surged by 15.34 per cent on an annual basis.

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