Food inflation inched up to 12.81 for the week ended July 3 from 12.63% in the previous week. But overall inflation for June stood at a higher 10.55% against 10.16% in May.
Amid protests over surging prices of essential commodities, chief economic adviser Kaushik Basu today said food inflation will fall substantially in the next two weeks.
The chief economic adviser however, admitted that non-food inflation is on a slow pick-up.
Addressing the press, Basu said the economy will grow faster than 8.5% this fiscal and the first quarter is likely to show up around 9% expansion.
"Food inflation continues to slow down and non-food inflation is on a slow pick-up," Basu said, adding food inflation will be substantially lower in the next two weeks.
Food inflation inched up to 12.81 for the week ended July 3 from 12.63% in the previous week. But overall inflation for June stood at a higher 10.55% against 10.16% in May. He added the food inflation has virtually flattened since last November but added non-food inflation has been picking up.
On growth, he said, "right now I believe growth will be faster than 8.5% this fiscal... in the first quarter it will be around 9%."
The government had earlier projected 8.5% growth for the current fiscal. Besides, the International Monetary Fund last week upped the country's GDP growth estimate to 9.5%, from 8.8% in 2010.
On the withdrawal of stimulus measures, Basu said he favoured a slow and gradual exit from the fiscal and monetary stimulus.
Basu said the immediate upward pressure on prices from petrol decontrol has already partly got registered in the June inflation figures and rest will be visible in the July data. He also opined that if more private players come into the oil space petroleum prices will decline in the long term.
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