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India's food inflation dips to 7.58 percent; Mukherjee sees further decline

New Delhi , Thu, 21 Jul 2011 ANI

New Delhi, July 21 (ANI): Finance Minister Pranab Mukherjee on Thursday said that the food inflation situation could improve further by year end.


According to government data, India's food price index rose to 7.58 percent while the fuel price index climbed to 11.89 percent in the year till July 09.


In the previous week, annual food and fuel inflation stood at 8.31 percent and 11.89 percent, respectively, Mukherjee told mediapersons in New Delhi.


"Inflation figure has come down. We have seen that non-food primary articles, it has come down from 11.58 to 11.13. Similarly, the food inflation has also come down from 8.31 to 7.58," said Mukherjee.


An optimistic finance minister further asserted that he expected the inflation rate to drop to 6 to 7 percent by the end of the fiscal year.


"If this declining trend continues, I do hope it would be having moderating influence on the price fall. Yesterday, I indicated that at the end of the year we may expect to have it around 6 to 7 percent," said Mukherjee.


The wholesale price inflation had increased to 9.44 percent in June, driven by high prices of manufactured goods and fuel, adding pressure on the central bank to raise rates despite signs of slowing growth in Asia's third largest economy.


The Reserve Bank of India is expected to raise its key policy rate by a further 25 basis points next week after inflation accelerated in June and may hike once more by the end of the year.ood articles have a weight of little over 14 percent in India's inflation basket.


The record food grain produced during farm year July 2010 to June 2011 was 23 million tonnes more than the year before. However, the demand is set to rise with population growing at nearly 1.8 per cent annually. (ANI)


Read More: Delhi | Bank | Inflation

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