Inflation declined to 7.25% in June as prices of manufactured items eased a little, although vegetables, wheat and pulses became costlier.

Inflation, as measured by the Wholesale Price Index was 7.55% in May. In June last year, it was 9.51%.

Overall food inflation rose to 10.81 per cent in June, from 10.74% in May. In June last year, inflation rate in this category was 7.6%. Food articles have 14.3% share in the WPI basket.

In the manufactured items category, prices of cotton textile, rubber and plastic products, iron and machinery eased a little year on year basis.

The rate of price rise in the manufactured products was 5% in June, as against 7.9% in the same month last year. In May this year, it was 5.02%.

In food articles category, rice turned expensive by 6.70% in June, wheat 7.46%, pulses 6.82% and vegetables by 20.48 on annual basis.

Easing of inflation has raised some hopes of cut in interest rate by RBI at its monetary policy review later this month. Meanwhile, inflation for April has been revised upwards to 7.50%, from the provisional estimate of 7.23%.

With inflation moderating in June over the previous month, the Finance Ministry said the decline is likely to continue with improvement in food supply situation.

Minister of State for Finance Namo Narain Meena told reporters that "We are hopeful that this declining trend will continue.”

He said the South-west monsoon forecast by India Meteorological Department is still positive as deficiency in rain fall has come down in the last two weeks.

Mr Meena added that "Availability of food articles is expected to increase and this will address supply constraints.”

He said the decline in June inflation is due to decrease in prices of some non food articles and fuel items year on year basis.

The wholesale price index based inflation in June declined to 7.25% from 7.55% in the previous month.

Source - FE

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