The Hindu Business Line : Inflation dips to 10-month low at 4.85%

On descent
Inflation was 4.85 per cent during the week ended May 26.
The easing of supply constraints in case of certain commodities, especially Primary Articles, led to the decline.

New Delhi June 8 The annual Wholesale Price Index-based inflation dipped below the Reserve Bank of India's target level of five per cent for the current fiscal to 4.85 per cent during the week ended May 26. Inflation was at 5.06 per cent during the pervious week.

The easing of supply constraints in case of certain commodities, especially primary articles, led to the decline in the inflation rate to its lowest level in 10 months. A high base during the corresponding week in the previous year also contributed to the slide.

The annual inflation rate during the latest reported week was the lowest since the week ended July 29, 2006, when the rate stood at 4.72 per cent.

According to the Centre for Monitoring Indian Economy, the high base effect in the coming months, expectations of normal monsoon, slower year-on-year increases expected in prices of steel and cement are likely to keep inflation at low levels.

Inflation in the primary articles' group declined to 8.62 per cent on a year-on-year basis, from 9.35 per cent during the pervious week, with fruits and vegetables, condiments and spices, and oilseeds responsible for the fall.

Inflation in manufactured products also came down a tad to 5.14 per cent, from 5.20 per cent. Inflation in the fuel group remained unchanged, after dipping to an eight-year low of 0.5 per cent in the week ended May 19.

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