A marginal fall in inflation numbers which touched 11.89% on July 12, after gaining 11.91% in the previous week has failed cheer the bankers and economists.
They had earlier expected that the inflation to go beyond 12% during the period.
SA Bhat, chairman and managing director, Indian Overseas Bank said, ?Although inflation has come down a bit due to the monetary measures taken by the Reserve Bank of India, I foresee monsoon to play a very decisive role ahead. Unfortunately, in 15 out of 33 important pockets of the country, monsoon has not fared well till-date.? If such a scenario continues, inflation might shoot up again. Otherwise by the end of this fiscal, the economy is most likely to come out from inflationary and high interest regime.
?I anticipate cash reserve ratio (CRR) to rise by at least 50 basis points in the immediate future,? Bhat added.
JM Garg, executive director, Punjab National Bank said, ?I expect stern measures by the regulator on July 29 in a bid to control inflation. If oil price stabilise around $100 per barrel six months down the line, I foresee inflation to come down to around 8%. The bumper crop production in the country too will help a lot to curtail inflation in the country.?
Allen CA Pereira, chairman and managing director, Bank of Maharashtra, explained that moderation in inflation is highly expected. ?I foresee it to come down further in days to come. However, inflation may not stabilise to a single-digit level,? he said. However, A Prasanna, economist, ICICI Securities observed that inflation will entirely depend on how oil prices behave.
?While oil prices have started cooling off, we think there may be a further fall in the same. However, monsoon conditions are also to be watched out for. We expect headline inflation to peak at 13% by August or later even if oil prices stay at the same level,? Pasanna said.
The country is already seeing good monsoon conditions up north India, which may help inflation to some extent. However, the effect can only be seen in October after the harvest season begins. Even if inflation starts coming off, a double-digit figure in inflation will remain till the end of the year, he said.