Inflation dips to -1.74%

Inflation fell to -1.74% for the week ended August 1—the lowest in three decades—even as prices of essential food items like pulses,cereals, fruits and vegetables continued to rise. In the previous week, inflation was at -1.58%. Inflation declined further mainly due to fall in the prices of industrial products and metals compared to the same period last year. Inflation is expected to be in the negative region for another two months because of a high base effect of 2008. This is the ninth week in a row when inflation remained in the negative territory even as prices of cereals surged by 12%, pulses by 18%, fruits and vegetables by 18.4% on an annual basis. Consumers continue to reel under the rising prices of essential commodities like cereals, pulses and sugar. During the week ended August 1, prices of barley, jowar and gram rose by 2% and condiments and spices, arhar and fruits and vegetables by 1% each. At the same time, imported edible oil, sugar and unrefined oil also got expensive.