Economic Alert: Annual inflation seen at 3.31 pc on Feb 14 Vs 3.92% last week

Annual inflation seen at 3.31 pc on Feb 14

The data is due around noon (0630 GMT) tomorrow.

Annual inflation rate is seen falling to its lowest in nearly 15 months at 3.3% in mid-February as cheaper fuels reduce prices of manufactured.

The median forecast is for a rise of 3.31% in the wholesale price index in the 12 months to Feb 14, compared with 3.92% in the week ended Feb 7. If realized, it will be the index's lowest reading since Nov. 24, 2007, when it was 3.11%.

The central bank expects annual inflation to be below 3% by March 31, the end of the 2008/09 fiscal year, with some analysts predicting it will be even lower.

We expect inflation to fall on account of continuation of second-round impact of fuel price cuts on manufactured product prices and a high statistical base. The inflation rate fell from above 5% in the last week of January after India cut its state-set retail fuel prices by up to 11%.

Economists expect the central bank to cut interest rates again in the near term, prompted by falling inflation and slowing economic growth in Asia's third-largest economy.

The wholesale price index is more closely watched than the consumer price index (CPI) because it includes more products and is also published weekly. The CPI is released monthly.