India’s inflation rate fell to a five-year low in September because of lower food and fuel prices.
The Wholesale Price Index (WPI), India’s main gauge of inflation, rose 2.38% in September from a year earlier. That is the smallest increase since October 2009.
India’s WPI rose by 3.74% in August.
Despite the moderation, analysts caution that the central bank is unlikely to lower the cost of borrowing in the near future.
That is because of poor monsoon rains that could affect future crops and drive food prices back up.
In addition, continuing geopolitical tensions could also see oil prices spiking up again.
Data also showed that falling global crude oil prices helped drive down India’s fuel inflation to 1.3% in September from 4.5% in August.
The figures came from India’s Commerce Ministry, which said food inflation declined by 1.4% as a result of lower prices for tea, fruits and vegetables, as well as maize, chicken and fish.