Food inflation at a 4-year low
Food inflation eased to a four-year low in mid-December due to improved supplies and lower prices of vegetables, potato, onion and wheat, bringing huge relief for the government which has been battling stubborn price pressures for more than a year. Data released by the commerce and industry ministry on Thursday showed food inflation stood at 1.81% in the week to December 10, lower than the previous week’s 4.35%. It stood at 13.22% in the same year-ago period. Food inflation had touched 2.26% in the week to February 9, 2008. Stubbornly high food inflation has remained a huge policy challenge for the UPA government for the past few years and has contributed to higher overall inflation. RBI has raised interest rates 13 times since March 2010 to tame price pressures. Policymakers have been wrong-footed several times while predicting the trend of food prices.