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Indian Economy update

Economy Update: Inflation falls to 5.07%. India's wholesale price index (WPI) came down to 5.07% for the week ended January 24, 2009 from 5.64% for the week ended January 17, 2009, lowest in almost last one year. The index number of 'primary articles' and 'manufactured goods' declined week-on-week for the week ended January 24, 2009.However, 'Fuel segment' saw some moderate up move during the same period.

'Fuel segment' continues to witness deflation for last seven consecutive weeks. Recent cut in fuel prices would start showing its impact from the next week's reported numbers. Manufacturing segment is largely on the downward trajectory for last two months, consequently, reducing the inflation risk emanating from it.One can expect headline Inflation (read WPI) to continue to fall at an accelerated pace before coming down to sub-2.0% levels by the end of FY09.