Inflation drops..

The brakes seem to be coming on the galloping inflation which rose 10.68% in the week to Oct. 18 from a year earlier after gaining 11.07% in the previous week. Expectations were it would be around 10.8%. India's annual inflation rate eased to a 4-½ month low in mid-October and could be in single digits before the end of 2008. It was the lowest annual rate since May 31, the week before a hike in state-set retail fuel prices pushed inflation into double digits. Prices are falling in India because of waning consumer demand and a decline in commodity prices. RBI last week reduced its economic-growth forecast to as low as 7.5% from 8% in the year to March 31.

With crude prices cooling and prices of most commodities falling, expectations are inflation may fall to single digit by the end of November itself.