New Delhi: Inflation slowed faster than expected in the first week of August as the prices of fruits, vegetables and other foods eased.
The wholesale price index was 4.05% in the week to 4 August, the lowest since the week ended 16 June, compared with 4.45% the previous week, the ministry of commerce and industry said in Delhi on Friday. Analysts had estimated inflation at 4.3%.
Food prices declined as flood waters receded in the North, East and North-East. These areas were swamped in monsoon flooding that caused an unexpected spiral in food prices in the last week of July.
“The impact of floods on prices was temporary and supply bottlenecks, at least for food items, have since cleared,” said D.H. Pai Panandiker, president of RPG Foundation, an economic policy group in Delhi.
The index of food articles declined 0.7%, led by a 6.5% fall in the index of vegetables and a 4.8% drop for the benchmark for fruits and vegetables, according to the report.
Poultry and meat prices fell 0.5% in the week.
The government on Friday said the inflation rate for the week ended 9 June was unchanged at 4.28%.