Inflation forecast may be pegged at 7 per cent

Inflation forecast may be pegged at 7 per cent

“The PMEAC would review the macro economic situation in Mid-February and is likely to revise upwards its fiscal-end inflation forecast from 6.5 per cent to about 7 per cent,” an official said.

While releasing the economic outlook for the current fiscal in July last year, the PMEAC had estimated inflation will come down to 6.5 per cent by the end of 2010-11.

However, PMEAC Chairman C Rangarajan later said that inflation was likely to come down to 5.5 per cent by fiscal-end, which was subsequently revised to six per cent and 6.5 per cent, respectively.

More recently, he put the March-end inflation estimate at 7 per cent on “higher-than-expected” wholesale price rise.

“March-end we had originally thought, it would be around 6.5 per cent, but given the current trend, it could be anywhere between 6.5 per cent and seven per cent,” Rangarajan had said.

Besides, in its quarterly monetary policy, RBI also raised its fiscal-end inflation forecast to 7 per cent from the earlier estimate of 5.5 per cent. Snapping the downward trend of two consecutive weeks, food inflation inched up to 15.57 per cent for the period ended January 15, due to escalating vegetable prices.