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Inflation seen at 0.61 pct on May 9

Inflation is expected to have risen in early May due to a rise in prices of some primary articles.

Written by Reuters | Mumbai |
May 20, 2009 1:54:30 pm

India’s annual inflation rate is expected to have risen in early May due to a rise in prices of some primary articles and manufactured goods,a Reuters poll of analysts showed on Wednesday.

The median forecast of 12 analysts was for a 0.61 per cent rise in the wholesale price index in the 12 months to May 9,compared with a 0.48 per cent rise the previous week.

“The price rise is more from non-food primary articles and manufactured goods,” said Sujan Hajra,chief economist at Anand Rathi Securities.

The inflation rate had fallen to 0.18 per cent in early April,the lowest since annual records started in 1977/78. It has trended up since then,although the annual rate dipped on May 2.

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The wholesale price index had been on a downward trend since September,after a fall in global commodity prices and cuts in fuel prices. It steadied in February before turning up in April.

Analysts said the annual inflation rate could turn down again and be negative by late June or early July,reflecting sharper rises in the wholesale price index a year ago.

“For both food and manufactured products,the week-on-week trends are actually up,but not up high enough for us to think there won’t be a negative inflation in June-July,” said Atsi Sheth,economist,Reliance Equities.

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