Inflation in India falls to 11-month low at 5.07%

New Delhi, Feb 5 (PTI) Inflation in India Thursday dipped
to a nearly one-year low of 5.07 percent on falling prices of
fruit and vegetables, a development which economists feel
would prompt the Reserve Bank of India (RBI) to cut rates
further to boost the economy reeling under the impact of the
global financial meltdown.

Inflation, measured by movements in wholesale prices,
dropped by 0.57 percentage points for the week ended January
24 from 5.64 percent a week earlier, mainly on account of
softening prices of food items like coffee and khandsari and
metals products of iron and aluminium.

The previous low was recorded at 4.98 percent for the
week ended February 9, 2008, while inflation during the
corresponding week last year was 4.8 percent.

Having declined for 10 consecutive weeks, the rate of
price rise moved up for two consecutive weeks to 5.64 per cent
the next week, before resuming the southward march.

The downward trend in inflation is likely to continue
following the decision of the government to reduce per litre
prices of petrol and diesel by Rs 5 and Rs 2, respectively,
and cooking gas by Rs 25 per cylinder from the midnight of
January 28.

The inflation data, which relate to price rise for the
week ended January 24, do not capture the impact of fuel price
cuts, which will also have a cascading effect on the overall
price situation. PTI BSP