CMIE forecasts 5.5% inflation for FY '09

Font Size

Print

Feedback

Email

Discuss

Save & Share Article

What’s this?

Digg	My Yahoo	Fark
del.icio.us	Newsvine	Reddit

Rate This Article

Rating:  1

Inflation is expected to come down to 5.5 per cent in financial year 2008-09 and kharif crop is likely to play a major role in this regard, says the Centre for Monitoring Indian Economy.

"We retain our forecast of 5.5 per cent inflation for the year FY '09. We expect inflation to increase further in the next couple of months and start receding from September onwards," CMIE said in its monthly review adding that kharif crop is expected to play a major role in this moderation.

Inflation, measured in the Wholesale Price Index (WPI) increased to 11.05 per cent for the week ended June 20.

Inflation started rising rapidly since January 2008 and went up by 441 basis points in a span of just five months.

The Government partially passed on the burden of rising international crude oil prices to the Indian consumer by hiking prices of petrol, diesel and LPG earlier this month, which accounts for 4.91 per cent of the WPI.

Price hike of petrol, diesel and LPG is expected to push up headline inflation by 50-60 basis points, CMIE said.

Although inflation is at a high level, it is unlikely to pinch Indian consumers as badly as suggested by the WPI numbers, it said.