Food inflation accelerated to a three-week high in late Sep due to costly vegetables, pulses and some protein-based items, prompting FM to reiterate that prices are a matter of concern. Data released by the commerce and industry ministry on Friday showed food inflation stood at 9.41% in the week to Sep 24, rising from the previous week’s 9.13%. It touched 16.88% in the same period a year ago.
Food inflation has hovered around the 9% mark for the past several months. It briefly went below 9% in early September at 8.84%. On Friday, Mukherjee once again said high inflation is a matter of concern for the government. Policymakers have been way off the mark while predicting the trend of food prices which have remained volatile for the past several months. “We shall have to see how to bring it down to a moderate level. I am constantly in touch with the RBI,” FM said.
The data showed pulses prices, which displayed signs of softening in the previous weeks, rose 7.54% in the week to September 24, while vegetable prices were up 14.88%. Potato prices rose 9.34%. The government expects food prices to moderate as supplies improve on the back of a robust monsoon.
Inflation has remained stubbornly high and way above the RBI’s comfort level. Overall inflation is near double-digits and the August reading came in at 9.78%. The RBI has raised interest rates 12 times since March 2010 and has said it is ready to sacrifice some growth in the short-term to calm price pressures. Some economists expect it to pause in its rate tightening cycle against the backdrop of the global economic slowdown.