Mumbai: Rising oil prices and a firming-up of global and domestic food prices are likely to have a significant impact on inflation outlook in 2011, a top RBI official said.
"High global energy, global commodities and domestic food prices are likely to have a significant impact on inflation outlook in 2011," Reserve Bank of India's Deputy Governor, Subir Gokarn, told reporters here today.
Global economic recovery, now starting to look somewhat more balanced and news of the US economy, more favourable than before, would contribute to pressure on commodity prices, Gokarn said.
The Reserve Bank is concerned the IMF estimate of an USD 10 increase in oil prices to USD 89 per barrel would have a significant impact globally.
The Food and Agriculture Organisation (FAO) has also sounded a warning a week ago that food prices worldwide may harden during 2011, intensifying global inflationary pressures.
"This is going to reinforce the already existing food price pressure we have in the domestic market," Gokarn said.