Annual inflation fell to 5.91 percent from 6.38 per cent for the week ending Dec 27, due to falls in the price of food and manufactured goods, according to official figures.

Inflation has fallen sharply from a peak of just over 12 per cent in August.

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

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

However, many economists forecast growth of around 6.8 per cent this year and as low as 5.5 per cent the following year. -- AFP