Inflation slips again in April

India’s inflation continued to slip for the second straight month. April inflation, as measured by the wholesale price index (WPI), fell to 9.59% from 9.9% in March. Economists had expected inflation to come in at 9.5%. The Government announced that it has revised February inflation to 10.06% from 9.89% earlier. The RBI expects inflation to ease around mid-2010 and has forecast March 2011 WPI inflation of 5.5%.

Chief economic adviser to the Finance Ministry Kaushik Basu said that wholesale price inflation is unlikely to touch double digits from now. "It is very, very unlikely that inflation will go back to double digits. In June it might increase slightly due to base effect," Basu said on the sidelines of an event in Kolkata.

The data showed that annual food inflation rose to 16.87% in April from 16.65% in the prior month. Fuel inflation eased to 12.55% in the same month from 12.7% in March. Manufacturing inflation cooled to 6.7% from 7.13% in March.

The RBI will exit monetary stimulus in a "calibrated" manner, deputy governor Subir Gokarn said. The RBI has raised interest rates twice since mid-March. The central bank’s reverse repurchase rate is currently at 3.75% and the repurchase rate at 5.25%.