Inflation seen at 3.03 pct on Feb 21

If realised,this would be the lowest reading since Oct. 19 2002,when inflation was at 3.01 per cent.

If inflation comes in slightly above forecast,it would be at its lowest since Nov. 2007,when inflation troughed at 3.07 per cent. The data is due around noon (0630 GMT) on Thursday.

The central bank expects annual inflation to be below 3 per cent by the end of the fiscal year in March,with some analysts predicting it to be even lower. Inflation was last under 3 per cent in July 2002.

“Basically,we are seeing inflation close to zero by end-March,” said D.K. Joshi,principal economist at CRISIL.

After peaking just below 13 per cent in August,inflation has fallen sharply as commodity prices plunged on a sharp decline in demand as the global economic and financial crisis deepens.

“Inflation in the reporting week should have fallen mainly on decline in prices of primary articles and manufactured goods,” said Sonal Varma,economist at Nomura in Mumbai.

“I expect negative WPI readings by April-May,which may stay for five months or so,” said Varma.