Wednesday, February 4, 2009

Inflation seen at 5.21 pc on Jan 24: Poll

Inflation rate should have fallen in late January as prices of food items eased after rising for two consecutive weeks, a Reuters poll.

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

Inflation had fallen to an 11-month low of 5.24 percent 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. Edible oil prices went up, iron ore prices also went up and the truckers strike impact would continue in this week. There was no dramatic fall in any other area, so year-on-year, we expect it to be at 5.38 percent.

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 percent 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 percent in August.

An up to 11 percent 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.


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