India's inflation eased to a 13-month low, opening door for the central bank to reduce its interest rates.
Thursday, the Ministry of Commerce Industry said inflation, based on the wholesale price index fell to 3.92% in the week ended February 7 from 4.39% recorded in the previous week.
The decline in the rate was more than the expected rate of 4.02%. In the corresponding week a year ago, inflation was 4.98%.
The index for primary articles declined by 0.2% to 248.0 from 248.5 recorded for the previous week and that for fuel, power, light and lubricants rose 0.5% due to higher prices of naphtha and furnace oil. At the same time, prices of aviation turbine fuel and light diesel oil declined.
Further, the price index for manufactured products, which has a weight of 63.75% in the wholesale price index, fell 0.4% during the week ended February 7 from the previous week. The index for manufactured food products rose 0.1%, but declined 0.7% for textiles. Prices for machinery and machine tools dropped 1.8%.
At the same time, the ministry revised inflation figure for the week ended December 13 to 6.24% from 6.61% reported initially.
Wednesday, Reserve Bank of India Governor Duvvuri Subbarao said there is room to cut interest rates. He stated that the impact of the global recession on the Indian economy was more than expected.
The central bank had already reduced its repurchase rate four times since October to 5.5%. The reverse repurchase rate is at 4%.
He said India's turnaround will be sharper and swifter once the global economy begins to recover backed by strong fundamentals and the untapped growth potential.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.