28 August : Lower prices of food and fuel items pulled down inflation to 12.4 per cent, offering hopes of what the Finance Ministry described as "early signs of moderation" in prices.
The decline in the rate of price rise by 0.23 per cent from 12.63 per cent in the previous week comes after five weeks of consistent rise.
"There are some early signs of moderation of inflation" the finance ministry said in a statement adding in the primary articles group 21 out of total 98 articles have shown decline in prices and there was no increase in prices of another 48 articles.
However, according to analysts, the decline could be temporary as crop production could be hit due to flood in many states and implementation of Sixth Pay Commission from next month would result in creation of more demands.
Inflation which still remains much higher than targeted nine per cent for the fiscal could prompt the Reserve Bank to further tighten monetary policy during the half-yearly review of the credit policy in October.
According to the ministry statement, prices of 30 essential commodities, after remaining range bound between 5.7 to 6.7 per cent for 19 weeks in the current financial year, increased from 6.74 per cent as on 9th August to 7.24 per cent during the reporting week.
During the week, prices vegetables declined by 1.1 per cent while meat, egg and fish became cheaper by 0.2 per cent.Besides, falling crude in the international market cooled down prices of industrial fuels like naphtha by 9 per cent and furnace oil by 6 per cent. DDINEWS