MUMBAI, Dec 15 (AFP): India's wholesale inflation fell to a five-and-a-half-year low driven by ongoing falls in fuel and food prices, data showed Monday, boosting expectations of an interest rate cut early next year.
The Wholesale Price Index (WPI), India's inflation measure with the biggest basket of goods, slipped to a lower-than-expected zero per cent in November from a year earlier, the lowest rate since July 2009, official data showed.
The latest WPI compares with a five-year-low of 1.77 per cent recorded in October, and was below analysts' estimates of about 1.1 per cent.
Analysts said Reserve Bank of India governor Raghuram Rajan's aggressive policies to curb price rises appeared to be paying off.
The sharp fall in global crude oil prices also helped keep inflation in check in India, which imports most of its fuel.
"This means the Reserve Bank of India (RBI) will be under pressure to cut rates," said Arun Singh, senior economist at credit data firm Dun & Bradstreet.
Figures released on Friday showed consumer inflation slowed to 4.38 per cent, a three-year low, while industrial output contracted, also putting pressure on the central bank to cut rates.
That inflation figure was below the RBI's six-per cent goal for January 2016, and down sharply from double-digit inflation last year.
Finance Minister Arun Jaitley is hoping for a cut in borrowing costs to boost investment and stimulate the faltering economy, which is mired in the longest slowdown in a quarter of a century.
But even with inflation falling, the RBI has resisted appeals to loosen monetary policy.
Rises in prices of food especially have caused huge hardship for India's 1.2 billion population, of which nearly a quarter live in severe poverty, according to the World Bank.
