Inflation at 0.3 perc as on May 2nd

India's annual inflation rate is expected to have fallen back towards zero at the start of May after rising in the previous three weeks, a Reuters poll of analysts showed on Wednesday. The median forecast of 11 analysts was for 0.3 per cent rise in the wholesale price index in the 12 months to May 2, compared with a 0.7 per cent rise the previous week.

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The price index is forecast to rise from a week earlier but at a slower pace than the rise a year earlier, when prices were rising rapidly, leading to a fall in the annual inflation rate. "A sharp rise in the index is expected week-on-week, but lower growth year-over-year is seen because of a high statistical base," said Rupa Rege Nitsure, chief economist at Bank of Baroda.

"The weekly spike is largely due to primary articles, secondly the market-determined prices of fuel components, and also rising input costs are getting reflected in the manufactured product prices," she said.

The inflation rate had fallen to 0.18 per cent in early April, its lowest reading since annual records started in 1977/78. The index had been on a downward trend since last September, after a fall in global commodity prices and cuts in state-set fuel prices, but steadied in March and early April before turning up in recent weeks.