Food inflation holds near 11-year high

Food inflation holds near 11-year high

New Dlehi: The wholesale food inflation rate held near an 11-year high as potato and other vegetable costs climbed, adding pressure on policymakers to take steps to cool price gains.

An index of food articles compiled by the commerce ministry increased 18.65% in the week ended 12 December from a year earlier, following a 19.95% gain in the previous week. A measure of fuel and electricity prices rose 3.95%, the ministry said.

Inflation is returning to Asia as commodity prices climb amid a economic recovery, prompting policymakers to shift their focus away from reviving growth. Australia and Vietnam raised interest rates this quarter and former Indian central bank governors said this month the country must take action against rising food costs.

Inflation at this point of time is clearly emerging as a bigger risk than managing growth, said N.R. Bhanumurthy, a professor at the National Institute of Public Finance and Policy in New Delhi.

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