Food inflation went up by a notch to 16.49 per cent for the week ended May 8 and analysts expect prices to remain at this level till the advent of the monsoons.
The annual food inflation in the previous reporting week was 16.44 per cent. Analysts said the food inflation would come down drastically only in the latter half of the fiscal when the impact of a normal monsoon becomes visible on crops.
Fuel prices remained flat over the week, but analysts said the Cabinet’s decision to hike natural gas prices would jack up rates of gas-based fuels.
The government on Thursday more than doubled the prices of natural gas to $ 44.20 per mmBtu.
“Fuel prices are slated to move up and in the coming days non-food articles will put pressure on inflation,” an economist with a leading bank said.
On a weekly basis, vegetables turned expensive by 2.41 per cent, onions turned dearer by 5.73 per cent, potatoes by 0.95 per cent and fruits by 0.41 per cent, while prices of urad and moong rose by two per cent each.
“Food prices will remain at around 17 per cent for the next 2-3 months. Eventually prices will come down with clarity on this year’s monsoon,” Crisil principal economist, Mr D. K. Joshi, said.
During the week, the prices of non-food articles declined by 0.35 per cent, as raw rubber prices sank by 7 per cent, while linseed fell by 2 per cent. On an annual basis, pulses turned costlier by 33.65 per cent and fruits by 17 per cent.
— PTI