India food inflation second lowest among emerging economies

India food inflation second lowest among emerging economies

New Delhi: India did fairly well on the food inflation front in 2010, as per the Economic Survey tabled in Parliament on Friday, recording a lower rate of price rise in essential items than other major emerging economies of the world, barring the Philippines.

India’s food inflation was the second lowest among all emerging economies in the 2010 calender year and the country also witnessed one of the steepest declines in overall inflation, the Survey said.

It said India’s average food inflation in November, 2010, was 5.4%, far lower than 15.8% in Argentina, 9.2% in Brazil and 11.7% in China, as per data on 15 emerging nations from the International Labour Organization (ILO) for the month.

The Philippines recorded food inflation of 3.2% in September, the month for which its data was considered.

Citing data from the ILO, the Survey said that while headline inflation showed a rise in other emerging economies, the overall rate of price rise went down in India.

This was more so in the case of food inflation, where India was among the handful of emerging economies to have witnessed an easing in the rate of price rise.

Giving example from individual months taken at random, it showed that overall inflation in India was 8.3% in November, as against 13.5% in the same month of 2009.

During the same month, inflation in China soared to 5.1% from 0.6% in November, 2009, and it went up to 11% in Argentina from 7.1% a year-ago.

In the case of Brazil, inflation stood at 5.9% in December, as against 4.3% in the same month of 2009.

In contrast, food inflation in India stood at 5.4% in November, 2010, down from 17.6% in the year-ago period. Other major emerging economies, including Argentina, Brazil, China, Egypt, Iran, Pakistan, Uruguay, Ukraine and Indonesia saw prices of food products spiralling upward at a much higher rate.

The Survey also blamed currency competition for creating inflationary pressure in emerging economies.

Talking about the issue, it said each country’s central bank is taking steps according to their own views.

“This has given rise to destabilizing currency competitions and may be a factor behind the recent increase in inflation in emerging economies," the Survey said.