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Lower food prices nudge Indian inflation down to 5.10%

India's year-on-year inflation rate measured by the wholesale price index fell in the week to July 14 aided by a drop in food prices and analysts said they saw it stable as demand was expected to be subdued.

Data released by the commerce and industry ministry showed the inflation rate fell to 5.10 per cent, from 5.17 per cent in the previous week.

The rate was 6.47 per cent in the corresponding week last year.

"Given the WTO (World Trade Organisation) regime, imports or the threat of imports is keeping prices of food articles down," Arun Kumar, economist with the New Delhi-based Jawaharlal Nehru University, told Reuters.

"With the Indian economy as also the world economy in the grips of a slowdown, I expect inflation to be stable at around five percent levels in the foreseeable future," he added.

The official wholesale price index for all commodities (base 1993-94=100) for the week ended July 14 stood at 160.8, unchanged from the previous week.

The index for food articles fell to 173.7 for the week ended July 14 from 175.9 in the previous week. The index for manufactured goods edged up slightly to 144.4 from 144 in the previous week, while the index of fuel, power, light and lubricants was unchanged at 222.7.

India's inflation rate has hovered around present levels after hitting 10-year highs in February. It touched 8.57 per cent in the week ended February 10.

The country's industrial output growth in May slumped to 1.9 per cent from 6.2 per cent in the same month last year.

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