>> Thursday, January 22, 2009
Having moved southward for a few weeks, inflation rose to 5.6% for the week ended January 10 from 5.24% a week earlier.
Earlier a Reuters poll predicted that the inflation rate was expected to have fallen to an 11-month low in the second week of 2009., triggered by a fall in the prices of manufactured goods.
The median forecast of 14 economists was for 5.05% rise in the wholesale price index in the 12 months to January 10, compared with 5.24% in the previous week.
Analysts said an eight-day truckers strike in early January would have pushed up the food price index and slowed the decline in the inflation rate.
Inflation raced into double digits in June last year after the government raised fuel prices. It peaked at 12.91% in early August, forcing the RBI to raise the repo rate to a seven-year high of 9%.
But since mid-October, the RBI has cut the repo rate by 350 basis points as the global financial crisis and high borrowing costs took a toll on economic growth.
Many analysts expect the inflation rate to fall below 2% by the end of March, sharply off the RBI's target of around 7%. - ET