Inflation rate continues dip, drops to 6.61 percent (Lead)

December 26th, 2008 - 3:21 pm ICT by IANS  

New Delhi, Dec 26 (IANS) India’s annual rate of inflation continued its downward trend, dipping to 6.61 percent for the week ended Dec 13 as compared to 6.84 percent the week before, official data released Friday said. The wholesale price index (WPI) for all commodities declined 0.2 percent to 230.7 (provisional) from 231.1 (provisional) the previous week.

The inflation rate was 3.84 percent during the corresponding week the previous year.

“The fall in inflation is related to the global slowdown due to which the commodities and oil prices have come down,” said D.K. Joshi, chief economist at credit rating agency Crisil.

“All these had earlier triggered higher rate of inflation but now the corrective prices have acted as a catalyst in decelerating inflation,” he added.

The index for primary articles rose 0.1 percent to 249.2 (provisional) from 249 (provisional) the previous week.

The index for fuel, power light and lubricants remained unchanged at the previous week’s level of 332.1 (provisional).

The index for manufactured products declined 0.3 percent to 201.7 (provisional) from 202.4 (provisional) in the previous week.

“Inflation will drop to 5 percent, the comfort level defined by the RBI (the apex Reserve Bank of India) within a month,” Joshi said.

“However, we are in a phase where growth is slipping but we need to have policies that can prevent growth from slipping further.”

Moreover, there is little room for fiscal stimulus, he said, adding: “But we can expect more rate cuts to happen in the near future”.

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