'WPI likely to fall to 3.5% in September'

Wholesale Price Index-based inflation is likely to slide to as much as 3.5 per cent in September, says financial services firm Credit Suisse.

The country’s WPI inflation fell to 4.7 per cent in May, its lowest rate since October 2009. According to its report, the lagged effects of weak manufacturing activity, softer money and lending growth and the fall in rupee denominated commodity price inflation are yet to be fully felt.

“With this in mind, we are looking for the WPI rate to fall below 4 per cent in August and bottom at around 3.5 per cent in September,” Credit Suisse said. From September onwards, however, a combination of tough base effects and the impact of the rupee depreciation will lead to a rise in WPI (Wholesale Price Index).

In 2013/14, Credit Suisse expects inflation to average 4.8 per cent 

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