Food inflation falls sharply to 7.78%

Food inflation fell to a one-and-a-half month low of 7.78 per cent for the week ended June 18 on the back of cheaper vegetables, pulses and potatoes.

Food inflation, as measured by the Wholesale Price Index (WPI), stood at 9.13 per cent during the previous week. It was over 20 per cent during the comparable period of June, 2010.

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As per data released by the Indian government on Thursday, vegetables became over 10 per cent cheaper year-on-year during the seven-day period under review.

Prices of pulses also went down by 9.50 per cent during the week ended June 18, while potatoes became 2.39 per cent cheaper on an annual basis.

However, prices of other food items remained high during the week.

The latest numbers on price rise of food items are the lowest since the week ended May 7, when food inflation stood at 7.47 per cent.

It comes a day after Prime Minister Manmohan Singh said that inflation will come down to 6.5 per cent by March-end if international oil prices soften and commodity prices do not rise further.

Headline inflation in the country stood at 9.06 per cent in May.

The latest week-on-week fall of 1.35 percentage points in food inflation is the sharpest in four-and-half months. The previous record of a decline of over 2 percentage points had happened in the first week of February.

Meanwhile, inflation in overall primary articles stood at 11.84 per cent for the week ended June 18, down from 12.62 per cent in the previous week. Primary articles have a share of over 20 per cent in the WPI basket.