New Delhi: Prices of essential food items continued to soar even as inflation further dipped to -1.55% for the week ended 27 June compared to -1.30 per cent.
Inflation, measured by movements in wholesale prices, fell mainly on account of declining prices of manufactured goods.
The decline has also been due to a high base effect, Crisil principal economist D K Joshi said.
The wholesale price index was as high as 12.03% in the corresponding week a year ago.
This graph shows the fall in wholesale price index from 7 June 2008 to 27 June 20009. Paras Jain / Mint
Among food items, pulses, fish marine, and fruit and vegetables turned expensive. Butter and imported edible oil became dearer by 1%.
This is the fourth week in a row when inflation remained in negative territory.
“As far as inflation is concerned, the Wholesale Price Index (WPI) inflation will go down for a while and (then) it will come up. At the end of March this year (2009-10), this could be in the range of 2 to 4%,” chief economic Advisor Arvind Virmani had said at the customary post-Budget briefing earlier this week.
Besides, inflation could rise in the coming weeks with hike in prices of petrol and diesel by Rs4 and Rs2 on 1 July.
According to HDFC Bank economist Jyotinder Kaur, “the fuel price hike is likely to affect it (inflation) by 35 basis points for the week ended July 4.”
Year-on-year, the prices of cereals went up more than 12.2%, pulses 16.7%, and fruit and vegetables 10.5%. At the same time, the prices of milk have gone up nearly 4.8% over last year, while spices were more expensive, by about 6.2%.
Among manufactured food products, sugar, khandsari and gur went up about 34.3% while processed fish turned dearer by more than 42.7% over the last year.
During the week, fish marine was dearer by 10%, arhar and fruit and vegetables by two per cent each, and urad and moong rose by 1% each. Also butter and imported edible oil turned dearer by 1% each.
However, the prices of eggs declined 10%, tea 3%, and maize and masur 1% each.
Among manufactured items, prices of cast iron declined 12% alloy steel 5% and steel ingots 1%.
At the same time, epoxy resin prices dipped as much as 35%, calcium ammonium nitrate n-content 16%, and methanol 3%.
Inflation for the week ended 2 May was revised to 1.48% from 0.4% as estimated provisionally.