Indian wholesale price inflation eased to its lowest in 10 months, holding within the central bank's comfort zone, but analysts said strong industrial growth meant the central bank would remain vigilant.
The widely tracked wholesale price index rose 4.80 percent in the 12 months to June 2, slowing from 4.85 percent a week earlier and well below a two-year high of 6.69 percent in January. The central bank has raised interest rates five times in the past year, the last time at the end of March, and may still have to tighten further despite the better inflation news.
"Inflation may come down even further in the coming weeks but I don't think the central bank is comforted by the decline in the headline numbers," said Indranil Pan, chief economist at Kotak Mahindra Bank. The inflation rate published on Friday matched a forecast of 4.80 percent in a Reuters poll of analysts. Wholesale price inflation is now at its lowest since the week of July 29 last year.