India inflation falls to 41-month low, signals more rate-cuts
2013-05-14 15:51:36
India's wholesale price inflation eased for the third successive month in April, dropping to the lowest level in nearly three-and-half years, giving the central bank enough room to ease its monetary policy further in a bid to prop up the the flagging economy.
Inflation as per the wholesale price index dropped markedly to 4.89 percent in April from 5.96 percent in March, marking the third successive deceleration, initial estimates from the Central Statistics Office showed Tuesday. Economists had forecast a more moderate slowdown to 5.45 percent. The rate was the lowest since November 2009.
The fall in the inflation rate reflected slower growth in food prices, which rose 6.08 percent compared to 8.73 percent in March. Primary articles as a whole recorded slower price growth of 5.75 percent in April compared to 7.6 percent a month earlier.
Costs of non-food articles increased 7.59 percent following a 8.95 percent increase in March. At the same time, the growth in fuel and power prices slowed to 8.84 percent from 10.18 percent.
On a monthly basis, the wholesale price index edged up 0.5 percent in April, data showed.
The statistical office said yesterday that inflation as per the consumer price index slowed to 9.39 percent in April from 10.39 percent in March. The price index for food and beverages climbed 10.61 percent, and costs of fuel and light rose by 8.1 percent.
Earlier this month, the Reserve Bank of India lowered its key rates by a quarter point for the third time this year to revive the slowing economy, which has seen growth falling to a decade-low during the final months of last year.
The bank, meanwhile, hinted that there is limited scope for further rate-cuts in the coming months, citing the huge current account deficit and high inflation. The stance of monetary policy is intended to address accentuated risks to growth, guard against the risks of inflation pressures re-emerging and to appropriately manage liquidity, it said.
The central bank projects baseline GDP growth of 5.7 percent for 2013-14 compared with the 5.5 percent growth it estimated for the previous fiscal year.