New Delhi: Lower prices of food and fuel items pulled down inflation to 12.4%, 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% from 12.63% 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 9%, for the fiscal could prompt RBI 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 5.7-6.7% for 19 weeks in the current financial year, increased from 6.74% as on the August 9 to 7.24% during the reporting week. During the week, prices vegetables declined by 1.1% while meat, egg and fish became cheaper by 0.2%.
Besides, falling crude in the international market cooled down prices of industrial fuels like naphtha by 9% and furnace oil by 6%. "It (fall in inflation) reflects the global crude price trend. Prices of naphtha, furnace oil light diesel oil etc have come down and certainly this is a welcome pause,'' Crisil principal economist D K Joshi said.
But agri commodities are still putting a pressure on inflation, he said, adding, "It is too early to conclude that the inflation has started coming down. This fall does not certainly mean that a declining trend has started start.''
However, in case of manufactured products rate of inflation in the current week increased to 11.02%. AGENCIES
The decline in the rate of price rise by 0.23% from 12.63% 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 9%, for the fiscal could prompt RBI 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 5.7-6.7% for 19 weeks in the current financial year, increased from 6.74% as on the August 9 to 7.24% during the reporting week. During the week, prices vegetables declined by 1.1% while meat, egg and fish became cheaper by 0.2%.
Besides, falling crude in the international market cooled down prices of industrial fuels like naphtha by 9% and furnace oil by 6%. "It (fall in inflation) reflects the global crude price trend. Prices of naphtha, furnace oil light diesel oil etc have come down and certainly this is a welcome pause,'' Crisil principal economist D K Joshi said.
But agri commodities are still putting a pressure on inflation, he said, adding, "It is too early to conclude that the inflation has started coming down. This fall does not certainly mean that a declining trend has started start.''
However, in case of manufactured products rate of inflation in the current week increased to 11.02%. AGENCIES
George Carlin - "In comic strips, the person on the right always speaks first."
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