New Delhi: Inflation fell to 11.44% on cheaper crude and steel prices, offering some comfort to policy makers trying to insulate the country from the impact of global financial crisis.
Although it is still far above the Reserve Bank’s tolerance level, wholesale prices-based inflation has been south-bound for three straight weeks now and dipped by 0.36% for the 7-day period ended 4 October, mainly due to 11% decline in steel and naphtha prices and six per cent fall in aviation fuel rates.
It was 11.80% a week ago.
However, there is no respite to the common man as the prices of fruits, vegetables and some cereals continued to increase during the week under consideration.
Fall in inflation comes amid fears of a slowdown, which was reflected in meagre 1.3 % industrial growth in August this year, down from 10.9 per cent a year ago in the corresponding month.
Even as the government deviated from normal practice and released the inflation data during the trading hours of bourses, the fall in inflation failed to prop up stocks, which plunged further by over 700 points with the benchmark BSE index ruling at around 10,130 at noon.
Analysts feel that inflation may soften further in the coming weeks as the crude prices have been coming down in the month of October.
“Inflation numbers may slide further from the current level as the crude has continued to soften during October,” said Crisil Principal Economist D K Joshi.
Besides, falling commodity prices would decrease in the prices of some manufactured items, he said.