Prices of essential food items continued to soar even as inflation further dipped to (-) 1.55 per cent for the week ended June 27 compared to (-) 1.30 per cent.
Inflation, measured by movements in wholesale prices, fell mainly on account of declining prices of manufactured goods.
The decline has also been due to a high base effect, risil principal economist D K Joshi said.
The wholesale price index was as high as 12.03 per cent in the corresponding week a year ago.
Among food items, pulses, fish marine, and fruit and vegetables turned expensive.
Butter and imported edible oil became dearer by one per cent.
This is the fourth week in a row when inflation remained in negative territory.
"As far as inflation is concerned, the Wholesale Price Index inflation will go down for a while and (then) it will come up. At the end of March this year (2009-10), this could be in the range of 2 to 4 per cent," chief economic advisor Arvind Virmani had said at the customary post-Budget briefing earlier this week.
Besides, inflation could rise in the coming weeks with hike in prices of petrol and diesel by Rs 4 and Rs 2 on July 1.
According to HDFC Bank economist Jyotinder Kaur, "The fuel price hike is likely to affect it (inflation) by 35 basis points for the week ended July 4".
Year-on-year, the prices of cereals went up more than 12.2 per cent, pulses 16.7 per cent, and fruit and vegetables 10.5 per cent. At the same time, the prices of milk have gone up nearly 4.8 per cent over last year, while spices were more expensive, by about 6.2 per cent.
Among manufactured food products, sugar, khandsari and gur went up about 34.3 per cent while processed fish turned dearer by more than 42.7 per cent over the last year.
During the week, fish marine was dearer by 10 per cent, arhar and fruit and vegetables by two per cent each, and urad and moong rose by 1 per cent each. Also butter and imported edible oil turned dearer by one per cent each.
However, the prices of eggs declined 10 per cent, tea 3 per cent, and maize and masur one per cent each.
Among manufactured items, prices of cast iron declined 12 per cent, alloy steel 5 per cent and steel ingots 1 per cent.
At the same time, epoxy resin prices dipped as much as 35 per cent, calcium ammonium nitrate n-content 16 per cent, and methanol 3 per cent.
Inflation for the week ended May 2 was revised to 1.48 per cent from 0.48 per cent as estimated provisionally.
