Inflation below 4%

After more than a year, inflation has come down below four per cent, at 3.92 per cent by the first week of February, as demand is slackening due to a slowing economy, prompting the Government and economists to say that the RBI may signal further cuts in rates. Inflation declined by 0.47 percentage points from 4.39 in the previous week, prompting economists to project that the rate of price rise would come down to two per cent by this fiscal-end and may even turn negative subsequently.
Inflation, which both the Government and RBI tried hard to rein in after its alarming rise from the first week of June last year, is no longer such a worry, which provides enough room to the central bank to further relax money supply.