Inflation at lowest level in nearly 15 months

26 Feb 2009 | 12:03 Inflation at lowest level in nearly 15 months

Inflation based on the wholesale price index rose 3.36% for the year through 14 February 2009, much lower than previous week's annual rise of 3.92%, data released by the government today, 26 February 2009, showed. It was the lowest rate of rise in inflation in nearly 15 months

In stark contrast to a solid surge in 2008, inflation has been declining sharply in the new year calendar 2009. The market has been agog with expectations of rate cut by the Reserve Bank of India (RBI). The sharp fall in inflation has provided room for the Reserve Bank of India (RBI) to cut interest rates further to support faltering economic growth.

As per reports, RBI governor D Subbarao will meet select heads of banks on Friday, 27 February 2009, to hold discussions on issues like credit flow and liquidity conditions.

The global financial sector crisis and recession in key global economies have pushed economic growth in India down to a six-year low. The Central Statistical Organisation (CSO) has pegged India's projected GDP growth for the year ending March 2009 at 7.1%, the slowest in six years and below the previous year's 9% rise. Global rating agency, S&P, however, feels that India's medium term growth prospects remain strong.

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