New Delhi: In a compliment to government's economic reform policies, the Economic Survey on February 26 said the inflation dipped to a two decade low during the current fiscal "as a manifestation of globalisation and liberalised trade regime".

Forecasting continuation of a low inflation (rate of price hike) trend, Economic Survey 2001-02 said low prices in manufactured sector, crude oil and agricultural food grains led to dip in inflation to the lowest level over two decades at 1.3 per cent in the beginning of 2001.

"With the opening up of the Indian economy, subdued inflation rates of major trading partner countries have a bearing on the domestic economy, influencing to some extent the domestic inflation rate," it said but added that continuation of low global international prices would play a major role in containment of general price hike.

While painting the rosy picture, the survey, revealed that the moderate inflationary expectations may continue through 2002-03 if there are not external energy price shocks.

The opening up of trade has increased competition for Indian industries and low inflation in competitor countries have had a sobering effect on domestic prices in the manufactured sector, it said.

Further, low international prices of crude oil exerted less pressure on domestic energy prices and adequate supply of most primary products and over supply of food grains caused inflation in the primary sector also to remain low this year, survey said.

PTI