The deceleration is expected on account of the kharif harvest and arrival of fresh stock of agro raw materials. The notepoints out that the current financial year started with an inflation rate of 4.8 per cent. The rate remained below 5 per cent during April-June.
However, following the adjustment in the administered prices of petroleum products in the first week of July, the wholesale price index shot up, leading to a price rise of 5.8 per cent in the first week of July.
The second quarter (July-September) showed undercurrents of inflationary pressure due to the sharp rise in the wholesale prices of foodgrain, mainly rice (9.9 per cent) and wheat (21.3 per cent). This led to a further escalation in price rise to over 6.5 per cent at the end of September.