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India inflation at 4.89%, a 41 month low
May 14, 2013, 8:45 am

[Getty Images]

The declining price of fruits and vegetables continues to drive down inflation [Getty Images]

The declining price of food items, including fruits and vegetables, pulled down inflation to nearly a three-and-a-half-year low of 4.89 per cent in April, which may present a case for further monetary policy easing.

Inflation based on the Wholesale Price Index (WPI) stood at 5.96 per cent in March – in April last year, it was 7.50 per cent.

This is the lowest level of inflation since November, 2009 when it stood at 4.78 per cent.

Commenting on the inflation figures, India’s department of economic affairs secretary Arvind Mayaram said: “We are happy that inflation figure has come down”.

Official data released today showed that WPI inflation in the manufactured items category declined to 3.41 per cent in April from 4.07 per cent in March.

The Reserve Bank of India will take into account the declining inflationary trend while unveiling its mid-quarter policy review on June 17.

Earlier this month, RBI cut key interest rates by 0.25 per cent in order to accelerate economic growth.

“Although headline WPI inflation has eased by March, 2013 to come close to the Reserve Bank’s tolerance threshold, it is important to note that food price pressures persist and supply constraints are endemic, which could lead to a generalisation of inflation…,” the RBI had said.

Source: Agencies

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