With low global crude prices, inflation to ease further: FM Arun Jaitley

As wholesale inflation fell to a five-year low, Finance Minister Arun Jaitley on Friday said that decline in global crude prices should further help in improving the price situation.

"We believe that softening of prices is in our interest. With crude prices down, this trend of lower food prices will continue," he told reporters.

The Minister, however, cautioned that it has to be seen how the oil prices augur going forward. "We should not be overtly optimistic at this time," Jaitley added.

Global crude prices have dropped to four-year lows of US $77 a barrel. Wholesale price based inflation dropped to 5-year low of 1.77% in October, from 2.38% in September, driven by decline in rate of price rise in food and fuel items.

Commenting on the industrial output growth which was at a three-month high of 2.5 per cent in September, Jaitley said he would have been happier had the growth been a little higher. "2.5% (IIP growth) is not enough for me to smile. Targets are higher and it will take its time. Steps that we are taking will take a little time before it shows it's impact," the Minister said. Factory output, measured in terms of Index of Industrial Production (IIP), showed an improvement mainly because of an uptick in mining and manufacturing production and larger offtake of capital goods.