Indian Economy: Inflation Rate Down to 0.48 percent

The inflation rate in the Indian Economy has come down to 0.48 percent after rising for three consecutive weeks. The Wholesale Price Index (or WPI) slowed down to 0.48 percent, mainly because of fuel prices. Though international crude oil prices have increased in the last one month, it is still less than year-ago prices leading to nearly 0.8 percentage point decline in fuel index that accounts for 15 percent of the WPI. The inflation rate as measured by the WPI stood at 0.7 per cent for the previous week ended 25 April and it was 8.73 percent for the corresponding week in 2008.

Experts believe the high base effect is pulling the inflation rate down, as the prices of food items in both primary and manufactured products category continue to be on the rise. The base effect has led to inflation coming down; however food prices are still high along with other items like pesticides and benzene have also shown a rise. Crude prices have also risen on a week on week basis.

We strongly believe there Indian food prices will see consistent rise in 2010, making investments in food companies an attractive option today.