In what could be music to the government, the inflation snapped its nine-week long northward journey to decline marginally by 0.02% as prices of food items like potato, maize, sea fish, tea and imported edible oils fell.

The fall in inflation, data for which was released on Thursday, for the week ending July 12 comes within 48 hours of the UPA government winning a crucial trust vote in Parliament, where the Opposition criticised it for the rising prices. The inflation rate, which stood at 7.82% for the week ended May 10, shot up to 11.05% in June after an increase in prices of petroleum products. It further rose to 11.91% for the week ended on July 5. Inflation was 4.76% during the corresponding week a year-ago.

According to official figures, the moderation was due to fall in prices of food items like potato, maize, sea fish, tea and imported edible oils, though other commodities like coffee, fruits and vegetables, mutton and certain pulses like urad, moong and arhar became expensive during the week.

Commenting on the latest inflation figure, HDFC Bank chief economist Abheek Barua said price rise still remains a matter of concern. "Inflation still remains a concern and could even touch 13% by October once the control over steel products is eased besides possible increase in prices of cement, edible oil and cotton after monsoon," said Barua. "RBI is expected to raise CRR rate by 25 basis points next week," he added.

A finance ministry statement said: "Out of 98 primary articles, the prices of 10 items have shown a decline, while 54 articles showed no increase." Analysts said the high inflation, which is ruling at a 13-year high level, may force the RBI to further hike short-term lending rates (repo) as well as statutory deposit requirements (CRR) when it reviews the credit policy on July 29.