Inflation for the week ended Jan 24 slipped to 5.07% from 5.64% as prices of food items eased after rising for two consecutive weeks.

Inflation for the week ended Jan 24 slipped to 5.07% from 5.64% as prices of food items eased after rising for two consecutive weeks.

This was lower than a forecast 5.21 per cent in the wholesale price index in the 12 months to Jan. 24, compared with 5.64 per cent in the previous week.

It would be the slowest annual rise since Feb 9 last year when inflation was at 4.98 per cent.

Inflation had fallen to an 11-month low of 5.24 per cent on Jan. 3, but it rose in the next two weeks following an eight-day nationwide truckers' strike that pushed up food prices.

"The lagged impact of the truckers' strike would have been worn off by now," said Saugata Bhattacharya, economist at Axis Bank, adding prices of some manufactured items had also dropped.

Seven analysts, however, said inflation would not have eased as much as expected.

"Edible oil prices went up, iron ore prices also went up and the truckers strike impact would continue in this week," Atsi Seth, chief economist at Reliance Equities, said. "There was no dramatic fall in any other area, so year-on-year, we expect it to be at 5.38 per cent."

The data is due around noon (0630 GMT) on Thursday.

The Reserve Bank of India (RBI) said in its monetary policy review on Jan. 27 it expected annual inflation to be below 3 per cent by the end of the 2008/09 fiscal year in March.

Inflation had raced into double digits in June last year after the government raised state-set fuel prices, and peaked just under 13 per cent in August.

An up to 11 per cent cut in fuel prices on Jan. 28 should push the inflation rate further lower in the coming weeks.

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.