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Indian inflation seen at 5.5 per cent in current year

India's average inflation, measured by the wholesale price index, is expected to be 5.5 per cent in the fiscal year to the end of March 2002, a Reuters poll of 10 research houses shows.

Economists estimated the WPI averaged 7.1 per cent growth last year.

Six respondents predicted 2002-03 inflation would be around 5.1 per cent. Others declined to forecast.

The year-on-year inflation rate was 5.52 per cent in the week ended May 26 compared to 6.59 per cent a year ago.

Economists said the key factor for the current year would be global oil prices, which caused inflation to rise last year and which were likely to cause inflationary pressures this year too.

Oil was a third of total imports last year.

In the wider economy, large stocks of foodgrains, a lack of demand in the sluggish manufacturing sector and the threat of cheap imports will ensure prices do not spiral upwards on any supply side factors, economists said.

"Buffer stocks of foodgrains are adequate and a slowdown in domestic and international economies will ensure manufacturing prices do not rise," said Indranil Pan, associate vice-president at Kotak Mahindra Capital Company.

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