New Delhi, Thursday 28 August 2008: As a welcome respite to the Indian consumers, staggering under the heavy weight of continuously spiraling prices, the inflation softened down to 12.40% for the week ended August 16 from 12.63% the week before.

The Wholesale Price index has declined for the first time in 28 weeks, raising hopes of further ease in prices in the coming weeks.

The ease in inflation is being attributed to the fall in prices of primary articles, fruits and vegetables. While the slight increase in the cost of manufacturing goods remained a matter of concern for the government, the significant decline in fuel and power index came as a big pop up.

The government expressed satisfaction over the fall in prices and said that these are the early signs of moderation in inflation. Although the high milk price is still a matter of concern, yet the overall decline in prices if the food articles is a very positive indication as inflation in the past several weeks had constantly spiralled taking cue from the increasing prices of the primary articles.

The last time inflation fell was when it dipped from 11.91 % to 11.89 % in the week ended July 12.