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RBI warns of suppressed inflation; rate cut likely

Jan 29 2013, 01:01 IST
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Summary* ‘Decline in inflation has not been commensurate with slowdown’

in data. Revival may take some more time. Quality of fiscal adjustment remains a concern, even as fiscal risks have reduced in 2012-13,” the RBI said.

Going forward, risks remain from suppressed inflation, pressure on food prices and high inflation expectations getting entrenched into the wage price spiral. “Wage inflation remains a source of concern. Rural wage inflation declined marginally but remained high at 18 per cent. In organised manufacturing, increases in staff costs remained in double digits,” it said.

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