Inflation rate keeps falling, now at 5.24 percent (Roundup)

January 15th, 2009 - 4:57 pm ICT by IANS  

New Delhi, Jan 15 (IANS) India’s annual rate of inflation fell further to 5.24 percent for the week ended Jan 3 from 5.91 percent the week before, official data released here Thursday showed.The inflation rate was 4.26 percent during the corresponding week the previous year.

Reacting to the falling inflation rate, Department of Economic Affairs Secretary Ashok Chawla predicted it would come down within ‘manageable limits’ to 3-4 percent by March-end.

“The inflation figures have shown a robust and a healthy sign in the past few weeks. I expect that by March-end, inflation will come down to 3-4 percent, which is in the manageable limits of the government,” Chawla told reporters on the sidelines of the ongoing Petrotech 2009 conference on oil and gas.

The wholesale price index (WPI) for all commodities declined 0.2 percent from the week under review to 229 from 229.5 the previous week. Both figures are provisional.

The index for primary articles declined 0.5 percent to 246.3 from 247.5 the previous week, while that for manufactured products fell 0.1 percent to 200.6 from 200.8.

Similarly, the index for fuel, power, light and lubricants declined 0.2 percent to 329.8 from 330.5.

“Once fuel prices are reduced further, the inflation figures should touch less than four percent by February-end, and moderate to around two percent by March,” said Dalip Kumar, head of projects at National Council of Applied Economics Research (NCAER), a Delhi-based think tank.

Petroleum Minister Murli Deora last week said another round of fuel price cut is on the cards.

But Kumar also cautioned that fuel prices would go up once a new government is elected at the centre, once again pushing up the rate of inflation.

India is expected to go to the polls in April or May.

However, maintaining that the figures for industrial production was “positive” for November, economic affairs secretary Chawla said the situation was improving.

“It points to the fact that we are expecting things to improve both in terms of manufacturing and exports fronts. I won’t say that the worst is over but the situation is improving,” Chawla added.

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