Inflation eases to 13-month low, at 4.28%

The wholesale price index-based inflation declined sharply to a 13-month low at 4.28 per cent for the week ended June 9, down from 4.80 per cent in the previous week.

Inflation was at 5.29 per cent in the corresponding period of the previous year. Higher comparative prices last year during the same week (the base effect) and a decline in prices of primary food articles contributed to lower wholesale inflation.

Finance Minister P Chidambaram attributed the fall in inflation to monetary tightening by the Reserve Bank of India, but said, “It is too early to draw any conclusion. We need to watch inflation in the next 4-5 weeks”.

Analysts agree with Chidambaram’s views. “Various measures taken by the RBI and the government have started yielding results. However, market remains concerned about prices of primary articles,” said Arun Kaul, general manager (treasury), Punjab National Bank.