Food inflation inches close to double-digit mark

New Delhi, Aug 25: Driven by higher prices of onion, potato and fruits, food inflation inched close to the double-digit mark at 9.8 per cent for the week ended August 13, prompting Finance Minister Pranab Mukherjee to describe the situation as "disturbing".

Food inflation, as measured by Wholesale Price Index (WPI), was up from 9.03 per cent in the previous week. It was over 14 per cent in the corresponding week of 2010.

As per the data released by the government today, onion price soared by 44.42 per cent year-on-year, while potato became 16.39 per cent more expensive during the week.

Fruits became dearer by 27.01 per cent and eggs, meat and fish by 13.37 per cent on an annual basis.

"The bad news is that inflation has increased... On the inflationary front, it is disturbing... I am more concerned about food inflation, which is perilously near double digits," Mukherjee told reporters here.

During the week ended August 13, price of milk was up 9.51 per cent, while vegetables and cereals became dearer by 6.52 per cent and 5.22 per cent, respectively.

Mukherjee, however, said assessment should be made only after looking at long-term trend and that not much should be read in weekly inflation numbers.

"As I have always maintained, weekly inflation figures are variant. We should make an assessment on the basis of a relatively longer period," Mukherjee said.

Meanwhile, experts said another rate hike by the Reserve Bank is likely as pressure remains both on food and non-food item prices.

PTI