NEW DELHI, Dec 4 (Reuters) - India's wholesale price index INWPI=ECI rose 8.40 percent in the 12 months to Nov. 22, below the previous week's annual rise of 8.84 percent, government data showed on Thursday.
The rate was also below a median forecast of 8.91 percent in a Reuters poll of analysts. **************************************************************
KEY POINTS: SUB-INDEX (WEIGHTING) Nov 22 Nov 15 Pct change PRIMARY ARTICLES (22.025) 250.5 250.2 +0.1 Food articles (15.402) 245.6 244.6 +0.4 FUEL,POWER, LIGHT AND LUBRICANTS (14.226) 345.0 353.3 -2.3 MANUFACTURED PRODUCTS (63.749) 203.1 203.5
-0.2 Food Products (11.538) 199.8 201.6 -0.9 Textiles 141.7 141.8 -0.1 ------------------------------------------------------------- Note: Articles in CAPITALS are sub-indices. Articles in lower case are specific categories within the sub-indices. -------------------------------------------------------------
- Annual inflation for the week ended Sept. 27 was revised up to 12.08 percent from 11.80 percent.
- The wholesale price index stood at 233.7 points in the week ended Nov. 22.
- Annual inflation was 3.11 percent during the corresponding week of the previous year.
ANUBHUTI SAHAY, ECONOMIST, STANDARD CHARTERED BANK, MUMBAI:
"Clearly focus is now on growth and we can expect rate cuts from the RBI and fiscal support from the government.
"Risk to growth has increased as evident from falling exports and lower IIP (industrial output) numbers."
SAUMITRA CHAUDHURI, ECONOMIC ADVISER, CREDIT RATINGS AGENCY ICRA, NEW DELHI:
"This confirms the fairly obvious trend of inflation coming off sharply and at this pace it is quite likely it will below 8 percent in the month of December itself.
"Steel and iron ore prices have been cut and this will reflect in the WPI numbers to be released in mid December.
"This decline in inflation adds to the headroom available to the central bank to further ease its monetary stance."
D.K. JOSHI, PRINCIPAL ECONOMIST, CRISIL, MUMBAI:
"Inflation is falling week after week, which is a good thing from the point of view of monetary policy easing."
SIDDHARTHA SANYAL, ECONOMIST, EDELWEISS CAPITAL, MUMBAI
"Going ahead, in the case of most of the industrial products, prices would actually remain flat or on a downward trajectory only. It is pretty clear now that may be by the end of this month or in the new year you will be seeing a petrol price cut. This could have at least a 50 basis point reduction direct impact in the index. As a result, you are going to see a 7 percent kind of level sometime in January, which was the target for the RBI by the end of March.
"Going ahead a zero inflation outlook is definitely holding true and we may see a negative inflation India for the first time in the last 30 years. I am reluctant to call it deflation because if you take a two-year kind of window the number will show a 4-5 percent annualised growth rate. A spell of negative inflation is a very clear possibility sometime may be in August, September, October next year."
ABHEEK BARUA, CHIEF ECONOMIST, HDFC BANK, DELHI: "I suspect it's the fuel group which has gone down on the back of cuts of naphtha, LSHF (low sulphur high-speed diesel fuel) and ATF (aviation turbine fuel) and some manufactured and commodity prices. That's really what has brought the inflation below what the market consensus was. "I think we are looking at very significant repo and reverse repo rate cuts of 50 basis points each. There is more headroom to RBI for monetary measures.
"If liquidity tightens going forward, there could be a 100 basis point CRR cut, but not in the next round of cuts."
- The rupee INR=IN was at 49.81 per dollar, unchanged from earlier.
- The 10-year bond yield IN082418G=CC briefly fell 1 basis point to 6.77 percent after the data.
LINKS: Ministry of Commerce and Industry Web site at www.eaindustry.nic.in.
- Annual inflation peaked at 12.91 percent on Aug. 2.
- The central bank has slashed its main short term lending rate by 150 basis points to 7.5 percent and banks' cash reserve requirements by 350 basis points to 5.5 percent of deposits to ease a cash crunch stemming from the global financial crisis and shore up growth.
- Managing liquidity and supporting growth have become the short-term priority for policy makers given a sharp cash squeeze in Indian markets and worries about a global recession.
- The Reserve Bank of India sees inflation at 7 percent at the end of the 2008/09 fiscal year in March. (Reporting by Rajkumar Ray; Editing by Charlotte Cooper)