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Indian inflation at nine-month low of 6.38%

AFP - Friday, January 2

NEW DELHI (AFP) - - India's inflation rate fell to a nine-month low, government data showed Thursday, providing more scope for interest rate cuts to boost growth.

The annual rate of inflation fell from 6.61 percent to 6.38 percent for the week ending December 20, according to the Wholesale Price Index, the most watched cost-of-living monitor.

Inflation has fallen sharply since it crossed 12 percent for the first time in 13 years in August.

A reduction in prices of petrol and diesel by the government and a cut in value added tax by four percentage points earlier in the month have brought prices down.

Economists said the central Reserve Bank of India was expected to lower interest rates at its next scheduled monetary policy meeting on January 27.

Various Indian government officials have projected economic growth of between seven and eight percent for the year to March 2009, down from three years of at least nine percent expansion.

However, many economists forecast growth of around 6.8 percent to March and as low as 5.5 percent the following year.

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