Inflation negative for third week; food items turn expensive

New Delhi, Jul 2 (PTI) Inflation fell to minus 1.3 per
cent for the week ended June 20, staying negative for the
third week in a row, due to a high base effect even as prices
of food like fruit and vegetables rose compared to the same
week last year.

The rate of price rise was (-)1.14 per cent in the
previous week.

The decline in inflation could be partly attributed to
high rate of price rise at 11.91 per cent in the corresponding
week last year.

However, prices of food items like fruit and vegetables
during the week ended June 20 rose by 0.6 per cent, while the
non-food items became expensive by 0.3 per cent.

Prices of fruit and vegetables rose by 11.19 per cent
compared to last year. Prices of cereals increased by 12.39
per cent, pulses by 16.52 per cent and condiments and spices
by 7.49 per cent.

Besides, inflation could rise in the coming weeks with
the government hiking prices of petrol and diesel by Rs 4 and
Rs 2 yesterday. An increase in petrol and diesel prices leads
to rise in prices of food items due to higher transportation
cost.

HDFC Bank Economist Jyotinder Kaur said, "Fuel price hike
is likely to affect it by 35 basis points for the week ended
July 4."

Among non-food articles, the prices of fodder rose by 4
per cent, groundnut seed by 2 per cent and raw wool by 4 per
cent. Prices in power, light and lubricants segments rose by
0.1 per cent.

Manufactured products became dearer slightly by 0.05 per
cent, textiles by 0.3 per cent and paper and paper products
by 0.5 per cent.

However, prices of food items like tea and fish marine
declined by 4 per cent each during the week.

On inflation Kaur said the rate of price rise is expected
to be in the negative territory at least till September.

"Inflation is on expected line and we expect it to remain
in the negative territory till September." PTI