NEW DELHI, Nov 27: India’s inflation fell to a six-month low, providing more room to the central bank to cut interest rates to spur flagging economic growth, analysts said on Thursday.

Inflation edged lower in Asia’s third-largest economy by a sixth of a percentage point to 8.84 per cent for the week ended November 15 from 8.90 the previous week.

The decline in the Wholesale Price Index, India’s closest watched cost-of-living barometer, was led by a fall in foods like fruit and fish.

The central bank “now has enough room for a rate cut” to boost the economy, said Crisil economist Dharma Kriti Joshi, principal economist at Crisil credit rating agency.

Inflation, which was nudging 13 per cent in August, has been falling as global commodity prices collapse and consumer demand drops amid a reduction in lending caused by the global financial crisis.

Analysts expect inflation, now at its lowest since mid-May, to reach about five per cent or lower by the end of the fiscal year in March, well within the central bank’s target of seven per cent.

The figures came on the eve of the release of second-quarter gross domestic product data for the three months ended July expected to show India’s economy expanded by its slowest quarterly pace in nearly four years.

Analysts are looking for India’s economy to show growth of around 7.3 per cent, down from 7.9 per cent in the previous quarter and at least nine per cent annual growth seen over the past three years.

There has been a slew of data pointing to a slowdown.

Industrial production grew by 4.8 per cent in September, down from 7.0 per cent the same month a year earlier as companies cut production in the face of falling demand and high borrowing costs amid a credit crunch.

After aggressively raising rates to fight inflation, the central bank recently changed tack and earlier this month cut its benchmark lending rate for the second time in two weeks to stimulate the economy.—AFP