For the tenth successive week, inflation remained below the one percent mark, for the week that ended May 9. However, compared to the earlier week’s 0.48 percent wholesale price index, the May 9 week index rose 0.13 percent to reach 0.61 percent.

The inching up of the week-over-week inflation figures resulted from the rising prices of vital food items, such as cereals, spices, tea, vegetables and fruit. Moreover, even the prices of manufactured goods like sugar, gur, imported edible oil, synthetic yarn, and steel ingots also showed an increase during the mentioned week.

However, responding to the softer financial position, quite a few banks have already cut their interest rates; which are still expected to drop further in case inflation remains below two per cent. In fact, a central bank professional forecasters’ survey indicates that wholesale price inflation will likely fall by as much as 1.4 percent in the June quarter, thereby turning negative and allowing for greater cuts in rates to fuel a sluggish economy.

According to an HDFC Bank economist, Jyotinder Kaur, though a rise in food items was the key reason behind the rise in inflation, it was still expected to plunge below zero. The economist said: “It is going to be negative possibly by the end of May or the first week of June.”