Veggies get cheaper, food inflation drops to 4-yr low
Fresh arrivals push prices down, rate dips to 1.81% during the week ended December 10, continuing the dramatic fall from 11.43% in mid-October. HT reports. Some respite, some hopebusiness Updated: Dec 23, 2011 02:02 IST
Onion prices during the week fell to about 50% of last year’s levels, when the vegetable’s price had skyrocketed to record levels.
Since the food inflation rate tracks the difference in food prices in comparable weeks over two years (example: 50th week of this year vs 50th week of last year), the difference in onion prices magnified the fall in the rate.
Prices of vegetables dropped during the week compared to last year bringing down overall food inflation, although protein-rich items such as pulses, milk, egg, meat continued to grow a fast clip. India's macro-economic managers were cautious in responding to the latest price data, which had prompted the RBI to signal pause in its interest rate hiking cycle.