Inflation at 5.24% for week ended Jan 3

Latst Inflation NumbersIndia’s headline inflation as measured by the change in wholesale price index (WPI) has declined 5.24% for week ended January 3, 2009 compared to 5.91% in the previous week as the WPI registered a week-on-wwk decline of 0.2% to 229.

The decline was visible across most of the segments. Major relief came from the primary articles index where prices declined by 0.5% while manufacturing index was down 0.1% week-on-week. Meanwhile the inflation figures for week ended Nov 8 was revised to 8.71% versus 8.9% (provisional).

Inflation is finally down to the comfort level of Reserve Bank of India which predicted 5-5.5% inflation for FY09 in the monetary policy review at beginning of the fiscal. Economists expect inflation to continue falling in coming weeks due to lower base effect of last year and general slowdown in economic activity. In fact, most economists agree that while inflation will be under 2% by and of the fiscal, India may witness deflationary phase around second quarter of next fiscal.