New Delhi: The Prime Minister`s economic
panel on Tuesday said inflation is likely to cross RBI`s projection
and the central bank may take actions in December itself.
"By the end of March 2010, it (inflation) could be close
to seven per cent," Prime Minister`s Economic Advisory Council
chairman C Rangarajan told reporters on the sidelines of a
summit here on Tuesday.
In its October policy review, the Reserve Bank had raised
its projection for inflation at the end of March to 6.5 percent from its earlier view of five percent.
"Usually there is a seasonal decline... but certainly it
appears that inflation by end of March will be higher than
what has been projected earlier by the RBI," Rangarajan said.
The former RBI governor also said the central bank would
keep a watch on inflation, and some moderation can happen
due to its actions, which, he said, is likely this month.
"We need to watch for behaviour of prices in December...
possibly some action will be taken (by the RBI), which can
have a moderating effect (on inflation)," he said.
Inflation for November jumped to 4.78 per cent from 1.34
per cent in October surprising all forecasters and creating
apprehensions of an early withdrawal of soft monetary regime.
"By the end of December, they (RBI) can review the
situation and take action...it (action) could come by end of
December depending how the prices have behaved in December,"